DLB

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Dolby Laboratories (NYSE:DLB) and the rest of the design software stocks fared in Q2. The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies. The 6 design software stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 2.9% above. Luckily, design software stocks have performed well with share prices up 16% on average since the latest earnings results. Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE:DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media. Dolby Laboratories reported revenues of $305 million, down 3.3% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a mixed quarter for the company with revenue guidance for next quarter exceeding analysts’ expectations. "We continue to execute against our full-year objectives, and we are building momentum across several of our key growth areas," said Kevin Yeaman, President and CEO, Dolby Laboratories. Dolby Laboratories pulled off the highest guidance raise but had the weakest performance against analyst estimates among its peers. Unsurprisingly, the stock is up 16% since reporting and currently trades at $60.04. Is now the time to buy Dolby Laboratories? Access our full analysis of the earnings results here, it’s free. Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms. Unity reported revenues of $546.5 million, up 23.9% year on year, outperforming analysts’ expectations by 6.1%. The business had a stunning quarter with an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations. Unity delivered the biggest analyst estimate beat in the group. The market seems happy with the results as the stock is up 30.2% since reporting. It currently trades at $46.19. Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free. Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ:PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM. PTC reported revenues of $600 million, down 6.8% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ billings estimates and a miss of analysts’ annual recurring revenue estimates. PTC delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Interestingly, the stock is up 13.2% since the results and currently trades at $149.93. Read our full analysis of PTC’s results here. With a mission to build software for the people that build the world, Procore Technologies (NYSE:PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device. Procore Technologies reported revenues of $375.2 million, up 15.8% year on year. This result topped analysts’ expectations by 2.6%. It was a very strong quarter as it also put up an impressive beat of analysts’ billings estimates and a solid beat of analysts’ adjusted operating income estimates. Procore Technologies had the weakest guidance update among its peers. The stock is up 20.1% since reporting and currently trades at $60.24. Read our full, actionable report on Procore Technologies here, it’s free. Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors. Cadence Design Systems reported revenues of $1.58 billion, up 24.2% year on year. This print surpassed analysts’ expectations by 0.5%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations. Cadence Design Systems pulled off the fastest revenue growth of the whole group. The stock is down 4.2% since reporting and currently trades at $324.45. Read our full, actionable report on Cadence Design Systems here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Cirrus Logic, Inc. CRUS reported first-quarter fiscal 2027 adjusted earnings of $1.84 per share, up 21.9% year over year and above the Zacks Consensus Estimate of $1.45. Strong demand for custom smartphone components supported the record first-quarter results. Revenue increased 12.9% to $460 million, aligning with the consensus estimate. The strong results were primarily driven by robust shipments of custom components used in premium smartphones, showing that demand from major mobile customers remains healthy despite a competitive consumer electronics market. Quarterly revenues grew 2% sequentially as higher sales of components shipped into smartphones boosted results. Year over year, the gains from increased smartphone component demand were partly offset by previously expected pricing reductions. Demand continued to be strong for custom boosted amplifiers and smart codecs. Cirrus anticipates these products will ship across multiple future smartphone generations. Development of the next-generation camera controller and a smart power IC for 3D sensing also remained on schedule. Cirrus Logic, Inc. price-consensus-eps-surprise-chart | Cirrus Logic, Inc. Quote The company’s largest customer accounted for 90% of total revenues in the fiscal first quarter. High-Performance Mixed-Signal revenues climbed to $210.7 million from $167.2 million a year earlier and represented 46% of net sales. Audio revenues increased 3.7% to $249 million and represented 54% of quarterly sales. Management described the opportunity pipeline across camera, battery and power applications as one of the strongest in the company's history. A power product is already shipping in tablets, while another product for an accessory has yet to reach the market. Additional phone and non-phone programs remain in active development. Non-GAAP gross profit was $242.1 million, with gross margin edging up to 52.7% from 52.6% a year ago. Favorable product mix supported the year-over-year comparison, while higher freight and supply-chain costs limited the improvement. Sequentially, pricing reductions outweighed cost savings. Non-GAAP operating expenses rose 13.3% year over year to $135.4 million. Higher employee-related costs were the main driver, with variable compensation, product development and professional expenses also contributing. Non-GAAP operating income reached $106.7 million, while operating margin slipped to 23.2% from 23.3%. Cirrus lowered its fiscal 2027 PC revenue expectations. Constrained supply of a key industry platform, memory and component shortages and delayed model introductions pushed out expected growth. Management characterized these pressures as timing issues rather than a change in the underlying opportunity. Customer interest remained strong for the company's low-power smart codec for AI-enabled PCs, with multiple designs targeted for next calendar year. Several customers also announced PCs based on NVIDIA's RTX Spark platform that are expected to ship later this year with Cirrus amplifiers and codecs. The company taped out a new high-performance analog front-end family for smart meters and expects to begin sampling during the September quarter. The products combine higher-accuracy voltage and current measurement with on-chip processing for power-quality analysis and fault detection. Cirrus is targeting a calendar 2028 market launch and sees potential applications in data center DC metrology, energy storage, EV charging and grid monitoring. A new GlobalFoundries agreement secures dedicated wafer capacity and pricing for 2027 and 2028 while supporting progress toward U.S. production. Cash and investments totaled $1.2 billion at quarter-end, with no debt outstanding. Operating cash flow was $64.1 million, and free cash flow totaled $48.6 million, translating into an 11% margin. CRUS spent $34.5 million to repurchase about 211,000 shares, leaving $239.6 million under its authorization. After quarter-end, it bought roughly 359,000 additional shares for $50.5 million. Management continues to prioritize organic investment, followed by acquisitions and buybacks, and is not considering a near-term dividend. For the second quarter of fiscal 2027, Cirrus expects revenues of $510-$570 million. The $540 million midpoint implies growth of 17% sequentially and a decline of 4% year over year. GAAP gross margin is projected at 52-54%, including a temporary benefit from favorably priced wafers that should largely sell through during the quarter. Non-GAAP operating expenses are expected at $140-$146 million. Full-year expenses are expected to increase as Cirrus expands R&D investment, while the non-GAAP tax rate is forecast at 16-18%. Cirrus Logic currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Dolby Laboratories, Inc. DLB reported third-quarter fiscal 2026 non-GAAP earnings of 69 cents per share, down 11.5% year over year but above the Zacks Consensus Estimate of 67 cents by 2.99%. Lower-than-expected operating expenses helped offset softer revenues and higher taxes. Revenues of $305 million fell 3.3% year over year and missed the consensus mark of $314 million by 2.79%. Licensing remained the core business at 93% of sales, while better-than-expected Dolby Atmos, Dolby Vision and imaging patent revenues were offset by deal timing and weaker foundational audio. Sonos, Inc. SONO reported third-quarter fiscal 2026 non-GAAP earnings of 27 cents per share, which soared 52% year over year and topped the Zacks Consensus Estimate of 24 cents. The 12.5% surprise reflected higher sales and disciplined spending despite rising memory costs. Revenues increased 9% to $375 million, beating the $367 million consensus by 2.3%. Speaker demand and international expansion supported growth. Sonos’ installed base exceeded 53 million connected devices across more than 17 million homes. Sony Group Corporation SONY reported earnings of ¥57.82 per share for the first quarter of fiscal 2026, up 35% year over year from ¥42.84. Adjusted net income increased 32.1% to ¥342.2 billion. Quarterly net sales advanced 8.2% to ¥2,837.8 billion. Growth was led by Imaging & Sensing Solutions and Music, while gaming profitability strengthened. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report Dolby Laboratories (DLB) : Free Stock Analysis Report Sonos, Inc. (SONO) : Free Stock Analysis Report Sony Corporation (SONY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Dolby Laboratories, Inc. DLB expects a sharp fiscal fourth-quarter rebound after third-quarter revenues fell 3.3% year over year to $305 million. The guidance midpoint points to approximately 23% growth, creating a clear test of whether newer licensing opportunities can offset uneven foundational businesses. The durability of that rebound will depend on content agreements, automotive volume and wearables, as well as how much revenue reflects contract timing rather than underlying adoption. Dolby forecasts fourth-quarter revenues of $362-$392 million, including licensing revenues of $335-$365 million. Non-GAAP earnings are projected between $1.13 and $1.28 per share. The outlook represents a substantial sequential improvement from the third quarter. Management expects the video distribution program, higher Dolby Atmos units in automobiles and new device categories to provide the main growth support. Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote Meta joined Dolby's video distribution program across Facebook, Instagram and WhatsApp, with a large agreement signed early in the fourth quarter. Alibaba also became a licensee, while the patent pool had 45 licensors less than a year after inception. These wins advance Dolby's goal of generating 10% of total revenues from content partners by fiscal 2028. A broader content-licensing base could reduce dependence on foundational device audio, although the pace of additional agreements remains important. Dolby has announced agreements with more than 40 automakers, up from more than 20 at fiscal 2025-end. Higher Atmos units in vehicles are expected to contribute to fourth-quarter growth, while support through Android Auto and Apple CarPlay can make the format easier to demonstrate and use. Xperi Inc. XPER is also expanding its automotive-media presence through DTS AutoStage, including an announced adoption by BYD. That activity reinforces the vehicle's growing role as an entertainment platform while underscoring competition for automaker relationships. The projected rebound is not entirely volume-driven. Fourth-quarter guidance benefits from a large agreement signed early in the period and more back-end-loaded mobile minimum commitments, which can shift revenues between quarters. Image Source: Zacks Investment Research Recoveries, true-ups and royalty reporting create additional variability. Cirrus Logic, Inc. CRUS, a supplier of audio and high-performance mixed-signal solutions for mobile and consumer applications, provides another reference point for the device ecosystem, where shipment demand can influence revenue visibility. Dolby expects a fiscal 2026 non-GAAP operating margin of approximately 34%, representing about 100 basis points of year-over-year expansion. Fourth-quarter non-GAAP gross margin is projected near 90%. The margin outlook could help convert content and automotive gains into earnings growth even if foundational audio remains uneven. Dolby also expects Atmos, Vision and imaging-patent revenues to rise roughly 15% in fiscal 2026, supporting a more favorable licensing mix. The fourth-quarter guide is meaningful, but its composition prevents treating the forecast as proof that licensing volatility has ended. Sustainable growth would require content and automotive contributions to extend beyond one quarter while device-related weakness stays contained. DLB currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. It has a VGM Score of B, Value Score of C, Growth Score of B and Momentum Score of B. The Growth Score of B supports the growth profile, the Momentum Score of B points to relatively favorable timing and the VGM Score of B reflects a supportive combined profile. The Value Score of C is more balanced. Style Scores complement the Zacks Rank rather than override it, so the Rank keeps the near-term view cautious until execution provides firmer evidence. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dolby Laboratories (DLB) : Free Stock Analysis Report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report Xperi Inc. (XPER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Dolby Laboratories has just enjoyed a sharp rebound, yet after a share price that is still down over the past several years, the current valuation checks point to a stock that screens closer to cheap than expensive rather than obviously mispriced either way. Over the past 5 years, Dolby Laboratories shareholders have seen the stock fall about 35%, which puts recent gains into context and raises the question of whether the current price fully reflects the company’s long term prospects. The recent jump in the share price followed upbeat commentary around Dolby’s audio and imaging technologies and expanded capital returns. The key risk is that revenue growth from these licensing driven products may not keep pace with what the current valuation already implies. On Simply Wall St’s broader checks, Dolby Laboratories scores 5 out of 6 on valuation, which suggests the stock leans toward the attractively priced side of fair rather than clearly overvalued. The issue now is whether Dolby Laboratories’ improved sentiment and valuation score leave enough upside for new investors after the recent bounce. Dolby Laboratories delivered -14.3% returns over the last year. See how this stacks up to the rest of the Software industry. The P/E ratio is a useful way to judge what you are paying today for Dolby Laboratories’ current earnings power. Dolby Laboratories currently trades on a P/E of about 24.6x, which is below the broader Software industry average of roughly 29.0x and also below the peer group average of about 35.3x. For a licensing driven business with established audio and imaging technologies, that puts the company at a discount to many software stocks on this simple earnings yardstick. The internal fair P/E estimate for Dolby Laboratories is around 24.6x, which is almost identical to where the stock trades today. That suggests the current price lines up closely with what this framework implies when it factors in the company’s profile and risks. Despite the strong Q3 2026 results and the expanded buyback program lifting sentiment, the earnings multiple still looks broadly in line with what the model views as a reasonable level. On the P/E multiple, Dolby Laboratories looks roughly fairly valued at current levels. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the valuation puzzle on Dolby Laboratories leaves off and spell out what kind of growth, margins and earnings path would need to play out for the stock to be worth materially more or less than today’s price on a reasonable view. Each Narrative sets out Dolby Laboratories' fair value as a thesis about the business that you can watch over time on Simply Wall St’s Community page. One of the top community narratives on Dolby Laboratories: 35% undervalued Read one of the top narratives on Dolby Laboratories Do you think there's more to the story for Dolby Laboratories? Head over to our Community to see what others are saying! For Dolby Laboratories, the current P/E that sits close to its internal fair estimate points to a stock that now looks more about right than clearly cheap. The broader valuation checks lean supportive, yet they also suggest that the easier opportunity may have passed for investors who were waiting on a clear discount. From here, the key question is whether Dolby can translate its audio and imaging position into steady enough licensing growth to justify holding this multiple without much valuation buffer. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DLB. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Dolby Laboratories? Here are five stocks we like better. Q3 revenue reached $305 million and non-GAAP EPS was $0.69, with strong Dolby Atmos, Dolby Vision and imaging-patent licensing partly offset by deal timing and weaker foundational audio. Dolby ended the quarter with $756 million in cash and investments and expanded its share-repurchase authorization to approximately $427 million. Dolby expects significant sequential growth in Q4, forecasting revenue of $362 million to $392 million and non-GAAP EPS of $1.13 to $1.28. Growth is expected from the video distribution patent program, automotive Dolby Atmos adoption, wearables and mobile minimum-volume commitments. Expansion initiatives gained momentum: Meta and Alibaba joined Dolby’s Video Distribution Program, while automotive agreements now cover more than 40 manufacturers. Dolby also reported continued Dolby Vision adoption in televisions, streaming, augmented-reality glasses and cameras. Big Screen Stock Soars on Blockbuster Q2 Earnings Dolby Laboratories (NYSE:DLB) reported third-quarter fiscal 2026 revenue of $305 million, within its prior guidance range, as strength in Dolby Atmos, Dolby Vision and imaging patents was partly offset by deal timing and foundational audio revenue. Non-GAAP earnings per share were $0.69, slightly above the midpoint of the company’s guidance range. Chief Financial Officer Robert Park said lower-than-expected operating expenses offset lower-than-expected revenue and higher taxes during the quarter. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Licensing revenue totaled $282 million, while products and services revenue was $23 million. Dolby generated approximately $167 million in operating cash flow, ended the quarter with $756 million in cash and investments, and repurchased 1.2 million shares for $65 million. The company also increased its existing share repurchase authorization by $350 million, bringing total authorization to approximately $427 million. Dolby declared a quarterly dividend of $0.36 per share, up 9% from a year earlier. Third-quarter GAAP operating expenses included a $4 million restructuring charge related to organizational changes intended to align resources with the company’s most impactful areas. → Microsoft Just Flipped the AI Spending Narrative Overnight For the fourth quarter, Dolby expects revenue of $362 million to $392 million, including licensing revenue of $335 million to $365 million. The company forecast non-GAAP gross margin of approximately 90%, non-GAAP operating expenses of $195 million to $205 million, and non-GAAP earnings per share of $1.13 to $1.28. At the midpoint, the fourth-quarter revenue outlook would represent 23% year-over-year growth. Park attributed the expected increase to the company’s video distribution patent program, higher Dolby Atmos unit volumes in automotive applications, and revenue from newer device categories such as wearables. The quarter is also expected to benefit from timing factors, including minimum volume commitments, particularly in mobile. → Carrier Earnings Could Send the Stock to a New All-Time High For fiscal 2026, Dolby narrowed its revenue outlook while maintaining the prior midpoint. The company now expects total revenue of $1.41 billion to $1.44 billion, licensing revenue of $1.31 billion to $1.34 billion, non-GAAP operating expenses of $785 million to $795 million, and non-GAAP EPS of $4.25 to $4.40. Dolby expects annual non-GAAP operating margin expansion of about 100 basis points, an improvement from its prior outlook for 50 to 100 basis points of expansion. The company said its full-year outlook includes higher tax expense from discrete items in the third quarter. Other revenue is expected to rise by the high teens, driven by automotive and the video distribution program. Broadcast revenue is expected to grow by the mid-single digits, supported by higher recoveries from imaging patents. Mobile, including wearables, is expected to increase by the mid-single digits on Dolby Atmos and Dolby Vision adoption. Consumer electronics revenue is projected to be roughly flat, as lower unit volumes are offset by higher recoveries and Dolby Atmos adoption. PC revenue is expected to decline by the low single digits, reflecting lower unit shipments and recoveries. Park said foundational audio revenue is expected to decline slightly for the year, while revenue from Dolby Atmos, Dolby Vision and imaging patents is expected to increase by roughly 15% year over year. Chief Executive Officer Kevin Yeaman highlighted Dolby’s effort to expand beyond traditional device licensing and said the company remains on track toward its target of generating 10% of revenue from content partners by the end of fiscal 2028. During the quarter, Meta became a licensee of Dolby’s Video Distribution Program, a patent pool that licenses imaging patents to video streamers. The agreement covers Meta’s Facebook, Instagram and WhatsApp platforms. Alibaba also became a licensee, covering video operations across its e-commerce, entertainment and digital media platforms. Yeaman said the patent pool has attracted 45 licensors in less than a year and counts ByteDance, Kuaishou, Meta, Roku, Tencent and Alibaba among its licensees. Park said Meta signed a large agreement early in the fourth quarter, contributing to the company’s fourth-quarter outlook. In response to analyst questions, Yeaman said the company’s pipeline includes streamers across different types of video content. He said additional licensees can accelerate decisions by prospective participants evaluating the pool’s breadth, pricing and coverage. Dolby also reported progress for its Dolby OptiView platform, which offers ultra-low-latency streaming, ad insertion, playback and sports-focused engagement tools. The company signed a multiyear agreement with Roberts Communications Network, a provider of U.S. horse-racing content, for ultra-low-latency video streaming. Google certified Dolby OptiView Ads as the first product in its Ad Manager technology partner program, according to Dolby. Yeaman said the company plans to begin scaling the ad product to its customer base in the fall after testing a third-generation version with early customers. He said one customer had seen revenue increases of 75% from the technology, which can improve ad targeting and fill rates. Dolby expects to ship sports fan-engagement solutions in coming months that use artificial intelligence to predict viewer behavior and create individualized stories around live action. The company expects more specific sports-intelligence products to reach the market next year. In automotive, Dolby said it has announced agreements with more than 40 original equipment manufacturers since launching the program. New developments included Volkswagen’s first Dolby Atmos vehicle in China and Buick’s pre-sales launch for the Dolby Atmos-equipped Electra E7 plug-in hybrid SUV in China. Google also announced Dolby Atmos support through Android Auto with launch partners including BMW, Genesis, Mahindra, Mercedes-Benz, Renault and Škoda. Yeaman said automotive is Dolby’s fastest-growing end market and its largest category within “other” revenue. The company has historically broken out end markets when they reach 10% of licensing revenue, and he said Dolby will examine whether to do so as it enters the next year. Dolby Vision 2 is now available in certain Hisense televisions, and TCL and Philips are expected to ship TVs with the technology by the end of the calendar year. Canal+ and Peacock are integrating Dolby Vision 2 to prepare content support, Yeaman said. The company also cited adoption in user-generated content and new devices. RayNeo launched what Dolby described as the first augmented-reality smart glasses equipped with Dolby Vision, while Insta360 launched the Luna Ultra camera with Dolby Vision capture support. Yeaman said Dolby is monitoring higher memory costs, particularly for mobile and PC markets. He said the effect varies by customer and product tier, while noting that Dolby expects growth from its video distribution program, automotive, wearables and OptiView initiatives despite the dynamic environment. Dolby Laboratories, Inc is a global leader in audio and imaging technologies, specializing in the development, licensing and deployment of solutions that enhance entertainment and communications experiences. The company's core business revolves around creating advanced audio codecs, noise reduction systems and spatial sound technologies for a wide range of applications, including cinema, broadcast, gaming, streaming and personal devices. Dolby's licensing model enables consumer electronics manufacturers, content creators and service providers to integrate its technologies into products such as televisions, smartphones, home theater systems and set-top boxes. Among its flagship innovations are Dolby Atmos, an immersive audio format that delivers three-dimensional soundscapes for theaters and home systems; Dolby Digital and Dolby Digital Plus, widely adopted audio compression formats for broadcast and streaming; and Dolby Vision, a high-dynamic-range imaging technology that expands color, contrast and brightness in displays. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Dolby Laboratories Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Revenue: $305 million for Q3 fiscal 2026, within guidance. Non-GAAP Earnings Per Share: $0.69, above the middle of guidance range. Licensing Revenue: $282 million. Products and Services Revenue: $23 million. Operating Cash Flow: Approximately $167 million generated in the quarter. Share Repurchases: Repurchased 1.2 million shares for $65 million; Board approved a $350 million increase to the authorization, bringing total to about $427 million. Dividend: Declared $0.36 per share, up 9% year-over-year. Cash and Investments: $756 million at quarter end. Q4 Revenue Guidance: Expected between $362 million and $392 million, representing a 23% year-over-year increase at the midpoint. Q4 Licensing Revenue Guidance: Expected between $335 million and $365 million. Q4 Gross Margin Guidance: Approximately 90% on a non-GAAP basis. Q4 Non-GAAP Operating Expenses Guidance: Expected between $195 million and $205 million. Q4 Non-GAAP EPS Guidance: Expected between $1.13 and $1.28. Fiscal Year 2026 Revenue Guidance: Expected to range from $1.41 billion to $1.44 billion. Fiscal Year 2026 Licensing Revenue Guidance: Expected between $1.31 billion and $1.34 billion. Fiscal Year 2026 Non-GAAP Operating Expenses Guidance: Targeted between $785 million and $795 million. Fiscal Year 2026 Non-GAAP EPS Guidance: Expected between $4.25 and $4.40. Operating Margin: Expecting an annual improvement of approximately 100 basis points on a non-GAAP basis. End Market Performance (Full Year): Other revenue expected up high-teens (driven by Auto and VDP); Broadcast up mid-single-digits; Mobile (including Wearables) up mid-single-digits; CE flattish; PC down low-single-digits; Foundational audio down slightly; Dolby Atmos, Dolby Vision, and Imaging Patents revenue up roughly 15% year-over-year. Warning! GuruFocus has detected 2 Warning Sign with DLB. Is DLB fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dolby Laboratories Inc (NYSE:DLB) reported Q3 revenue and earnings within guidance, with non-GAAP EPS of $0.69 slightly above the midpoint. The Video Distribution Patent program gained significant traction, with major licensees like Meta and Alibaba joining, bringing total licensors to 45 in less than a year. Dolby OptiView secured key deals, including a multi-year agreement with Roberts Communications Network, and its ad insertion engine was certified by Google Ad Manager. Strong momentum in Automotive, with over 40 OEM agreements, including new wins with Volkswagen in China and Buick, and expanded support for Dolby Atmos via Android Auto. Q4 revenue guidance at the midpoint implies 23% year-over-year growth, driven by VDP, Dolby Atmos in cars, and new device categories like Wearables. The company raised its full-year operating margin improvement expectation to approximately 100 basis points on a non-GAAP basis. Q3 revenue was slightly below expectations due to deal timing and lower foundational audio revenue, partially offset by better performance in other areas. The company faces potential headwinds from rising memory costs, which could impact unit volumes in Mobile and PC markets, though TV is less affected. PC revenue is expected to decline low-single-digits for the year due to lower unit shipments and recoveries. Consumer Electronics revenue is expected to be flat, with lower unit volumes offset by higher recoveries and Dolby Atmos adoption. The company incurred a $4 million restructuring charge in Q3 for organizational changes, indicating ongoing cost alignment efforts. Foundational audio revenue is expected to decline slightly for the year, reflecting ongoing challenges in that segment. Q: Can you discuss the sustainability of the 23% year-over-year revenue growth expected in Q4, and how much is impacted by quarterly revenue shifting out of Q3?A: Robert Park (CFO) explained that Q4 growth is driven by momentum in key areas, including the Video Distribution Patent (VDP) program with a large Meta deal signed early in Q4, higher units from Dolby Atmos in the car, and new device categories like Wearables. He also noted that Q4 benefits from the timing of minimum volume commitments, particularly in Mobile, which are more back-end loaded than last year, while last year's Q4 was softer due to timing. Q: After signing large licensees like Meta and Alibaba to the VDP, what impact does this have on encouraging future participation from other licensees?A: Kevin Yeaman (CEO) stated that the program is coming together well in its first year, with 45 licensors and high-profile licensees. He explained that each new licensee makes it easier to secure the next deals, as more participants validate the pool's comprehensiveness and pricing, helping move potential licensees faster through their evaluation process. Q: What is the level of discussion with large domestic streaming networks regarding the VDP, and do you still view them as realistic potential wins?A: Kevin Yeaman (CEO) confirmed that Meta is one of the largest streamers of video content globally, and the pipeline is strong, including streamers of all types of video content. He expressed increasing confidence in the program relative to a year ago, given the execution and the momentum from each new licensee. Q: Given the strength in Auto and the expansion to Android Auto, are we getting closer to breaking out the Auto business as a separate segment?A: Kevin Yeaman (CEO) said they are getting closer, noting that they typically break out a segment when it reaches 10% of licensing revenue. He indicated that as they go into the next year, they will have a close look at it, as Auto is the highest-growing end market and the largest within the "Other" category. Q: How is the rising memory cost impacting CE customers' plans for new product introductions, and does it affect Dolby's outlook?A: Kevin Yeaman (CEO) explained that Mobile and PC are the most impacted by memory prices, while TV is less affected. He noted that some customers are eliminating lower-end lines due to memory costs, but this doesn't proportionally impact Dolby because of higher attach rates and technology content in higher-end devices. He stated that all this is factored into current guidance, and while they expect growth from VDP, Auto, and Wearables, memory prices are being watched closely as a potential offset. Q: Is there any differentiation in the pace of adoption for Dolby Vision 2 across various tiers of TVs?A: Kevin Yeaman (CEO) said there is no change in pace from previous discussions. Hisense has some in-market TVs updated, and TCL and Philips are expected to ship by the end of the year. He noted that CES will become the focal point for most customers adopting the technology going forward, with content partners CANAL+ and Peacock on track to provide Dolby Vision 2 content. Q: What has driven faster adoption of Dolby Atmos in international autos, and what needs to change in the US market?A: Kevin Yeaman (CEO) attributed initial momentum to China, where EV innovators focused heavily on in-car entertainment, and being the largest vehicle market, it attracted global automakers. He noted that Europe has Mercedes-Benz and BMW, India has Mahindra and Tata, and the US has Cadillac. The next milestone is penetrating mainstream, higher-volume models, which will benefit the US and global markets. Q: Can you elaborate on the vision for Dolby OptiView and what is resonating most with partners?A: Kevin Yeaman (CEO) described the vision as moving from one-to-many experiences to personalized, real-time streaming experiences. He highlighted Dolby OptiView Ads, which is seeing customers achieve up to 75% increases in revenue due to server-guided technology that improves ad targeting and fill rates. The solution is certified through Google Ad Manager, and they plan to scale it to their customer base in the fall, with Sports Intelligence solutions expected in market next year. Q: What impact is Dolby Vision 2 having on adoption of Dolby Vision 1, and how are OEMs segmenting across both?A: Kevin Yeaman (CEO) said it's early days, with focus on getting the first three customers in market, all moving from Dolby Vision to Dolby Vision 2, starting with higher-end models. He expects CES to be when customers announce more about their go-forward plans. Q: Can you provide color on capital allocation, given the increased pace of share repurchases in fiscal 2026?A: Robert Park (CFO) acknowledged the increased velocity and volume of buyback activity, confirming they will continue to execute on their policy of at least offsetting dilution from stock-based compensation. He noted that decisions are made quarterly based on facts, circumstances, and business needs, and they have been stepping up activity each quarter year-to-date. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Dolby Laboratories, Inc. DLB reported third-quarter fiscal 2026 non-GAAP earnings of 69 cents per share, down 11.5% year over year but above the Zacks Consensus Estimate of 67 cents by 2.99%. Lower-than-expected operating expenses helped offset softer revenues and higher taxes. Revenues of $305 million fell 3.3% year over year and missed the consensus mark of $314 million by 2.79%. Licensing remained the core business at 93% of sales, while better-than-expected Dolby Atmos, Dolby Vision and imaging patent revenues were offset by deal timing and weaker foundational audio. In the past year, shares have lost 24.5% compared with the Zacks Audio Video Production industry’s decline of 5.1%. Image Source: Zacks Investment Research Licensing revenues declined 2.6% year over year to $282.35 million. Broadcast fell 4.2% to $106.58 million, mobile declined 9.4% to $51.01 million and PC decreased 15.6% to $28.34 million. Timing of minimum volume commitments and lower recoveries weighed on these areas. Consumer electronics increased 12.2% to $31.51 million, primarily on recoveries, while other licensing revenue rose 7.0% to $64.91 million. Dolby Cinema and Atmos adoption in automobiles supported licensing revenue, partly offset by lower gaming-console unit shipments and imaging-patent revenue. Products and services revenue fell 11.7% to $22.64 million because cinema-product sales declined. Meta joined the video distribution program covering Facebook, Instagram and WhatsApp, while Alibaba signed for video operations spanning e-commerce, entertainment and digital media. The patent pool had 45 licensors after roughly a year, and management said the growing roster is helping advance discussions with other large streamers. Dolby OptiView secured a multiyear agreement with Roberts Communications Network for ultra-low-latency horse-racing streams. Google certified OptiView Ads for its Ad Manager partner program. Dolby also announced partnerships with more than 40 carmakers, up from over 20 at fiscal 2025-end. Android Auto added Atmos support with partners including BMW, Genesis, Mahindra, Mercedes, Renault and Skoda. GAAP gross profit declined 2.5% to $264.68 million, but gross margin rose to 86.8% from 86.0% as cost of revenue fell faster than sales. Products and services gross margin improved to 22% from 13%. Within services, lower Dolby Cinema warranty and maintenance costs supported margin performance. GAAP operating expenses increased 2.9% to $230.36 million. General and administrative expenses rose 4.5% to $75.59 million, mainly on litigation and patent-pool program costs, while a $3.96 million restructuring charge compared with a $0.55 million credit a year ago. Operating income fell 28% to $34.32 million, and the effective tax rate increased to 33.3% from 16.2%. For the fourth quarter of fiscal 2026, Dolby expects revenues of $362-$392 million, licensing revenues of $335-$365 million and non-GAAP earnings of $1.13-$1.28 per share. Non-GAAP gross margin is forecast at about 90%, with operating expenses of $195-$205 million. The revenue-guidance midpoint implies 23% year-over-year growth. Management expects support from the video distribution program, including the Meta deal signed early in the fiscal fourth quarter, higher Dolby Atmos units in automobiles, new device categories such as wearables and the timing of minimum volume commitments. Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote For fiscal 2026, DLB projects revenues of $1.41-$1.44 billion, licensing revenues of $1.31-$1.34 billion and non-GAAP earnings of $4.25-$4.40 per share. Non-GAAP operating margin is expected near 34%, representing roughly 100 basis points of year-over-year improvement. Management expects other licensing revenue to rise in the high teens, driven by automobiles and the video distribution program. Broadcast and mobile are forecast to grow in the mid-single digits, consumer electronics should be roughly flat and PC is expected to decline in the low single digits. Dolby Atmos, Dolby Vision and imaging-patent revenues are projected to grow about 15%. The company generated approximately $167 million in quarterly operating cash flow and ended the period with $756 million in cash and investments. Dolby said its liquidity sources should be sufficient to meet anticipated cash requirements for at least the next 12 months. Dolby repurchased 1.2 million shares for about $65 million and increased its buyback authorization by $350 million, leaving approximately $427 million available. It also declared a 36-cent dividend, up 9% year over year. Dolby currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Sonos, Inc. SONO reported third-quarter fiscal 2026 non-GAAP earnings of 27 cents per share, which soared 52% year over year and topped the Zacks Consensus Estimate of 24 cents. The 12.5% surprise reflected higher sales and disciplined spending despite rising memory costs. Revenues increased 9% to $375 million, beating the $367 million consensus by 2.3%. Speaker demand and international expansion supported growth. Sonos’ installed base exceeded 53 million connected devices across more than 17 million homes. America Movil, S.A.B. de C.V. AMX reported net income per ADR of 47 cents for the second quarter of 2026, up from 38 cents in the prior-year quarter. The earnings figure missed the Zacks Consensus Estimate of 52 cents. Total quarterly revenues rose 3.1% to Mex$241,071 million, driven by rapid momentum across the Service and Equipment segments. BlackBerry Limited BB reported first-quarter fiscal 2027 non-GAAP earnings per share of 4 cents. The figure beat the company’s estimate of 2-3 cents. In the year-ago quarter, it reported a non-GAAP EPS of 2 cents. The Zacks Consensus Estimate was pegged at 3 cents per share. BlackBerry generated $152.9 million in fiscal first-quarter revenue, representing 26% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dolby Laboratories (DLB) : Free Stock Analysis Report America Movil, S.A.B. de C.V. Unsponsored ADR (AMX) : Free Stock Analysis Report Sonos, Inc. (SONO) : Free Stock Analysis Report BlackBerry Limited (BB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Vice President of Investor Relations - Peter L. Goldmacher Chief Executive Officer - Kevin J. Yeaman Chief Financial Officer - Robert J. Park Operator: If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. As a reminder, this call is being recorded Thursday, 07/30/2026. I would now like to turn the conference over to Mr. Peter L. Goldmacher. Vice president of investor relations. Peter? Please go ahead. Peter L. Goldmacher: Good afternoon. Welcome to Dolby Laboratories Third Quarter Fiscal Year 26 Earnings Conference Call. Joining me today are Kevin J. Yeaman, Dolby Laboratories' CEO and Robert J. Park, CFO. As a reminder, today's discussion will include forward looking statements including our fiscal 26 fourth quarter and full year outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause 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-Q. 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 would like to turn the call over to Kevin. Kevin J. Yeaman: Thanks, Peter, and thanks to everyone joining us on the call today, Revenue and earnings for the third quarter were within the range of guidance we provided on the last earnings call. We are narrowing the range of guidance for the full year and keeping the midpoint of revenue the same. We expect strong sequential growth in Q4, driven by momentum in a number of our key growth areas. We have strong visibility into the pipeline of deals for the quarter And many of them have closed early in Q4. Robert will share more details on this and on the financials overall in a few minutes. Dolby has maintained its leadership position for over 60 years by innovating and raising the bar on the entertainment experience. We do this by working with creatives, content distributors, and device makers, giving us a unique on the collective needs, challenges, and opportunities of the entertainment ecosystem, which enables us to deliver experience that come to life in the highest possible quality. This quarter, I would like to start with our focus on expanding our total addressable market beyond device licensing. We are working with a growing number of content partners that are looking to differentiate on experience and drive deeper engagement with their audiences. And we are making good progress on our target for 10% of revenue from these partners by the end of FY28. Let's start with the video distribution program. The patent pool that licenses imaging patents to content streamers. Meta, 1 of the world's largest streamers of video content, became a licensee of the program covering its Facebook, Instagram, and WhatsApp platforms. Also, Alibaba became a licensee this quarter to cover its video operations, including ecommerce, entertainment, and digital media platforms. We are encouraged by the early traction and the quality of the participants joining the pool. In less than 1 year since inception, 45 licensors have already attracted some of the biggest names in streaming as licensees to the pool. Including ByteDance, Kuaishou, Meta, Roku, Tencent, and Alibaba. We remain excited by the early momentum from this pool, and we expect it to continue. Moving on to Dolby OptiView, We closed a number of key deals in the quarter. Including a multiyear agreement with Roberts Communications Network, the largest provider of horse racing content in the US. For ultra low latency video streaming. Also in the quarter, Google announced that Dolby OptiView Ads, our ad insertion engine, was the first product certified through their ad manager technology partner program. This certification recognizes the performance and monetization improvements that Dolby OptiView Ads delivers. When integrated with Google Ad Manager. While this partnership is early days, we are looking forward to working with Google to win new customers. Last quarter, I talked about how at the NAB show in Las Vegas, we showed new solutions for fan engagement in live sports. These solutions use AI to predict viewer behavior and to generate compelling stories for individual fans based on the action and their interests. Fan engagement is a top focus for the sports industry, we have seen strong interest in these new solutions, which will be shipping in the coming months. We believe that the Dolby OptiView platform which brings together these capabilities with ad monetization, low latency streaming, and cross platform playback. Is a unique system that will lead the future of the live sports experience. We are excited by the progress we are making and expanding our addressable market to include content platforms where we earn revenue based on usage. Moving on, Dolby Vision and Dolby Atmos continue to bring the most immersive experiences to life. Starting with the World Cup, viewers in all 3 World Cup host countries were able to enjoy the World Cup in Dolby, through partners including Peacock and Comcast in The US, Bell in Canada, and TV Azteca in Mexico. Fans in some of the most passionate football countries like Brazil, Colombia, Germany, and Spain were also able to enjoy the World Cup in Dolby. On TVs, Dolby Vision 2.0 is now in market with some Hisense TVs. And by the end of this calendar year, TCL and Philips will also be shipping televisions with Dolby Vision 2.0. Moving on to auto, we have announced agreements with over 40 auto OEMs since the program started. A few of our new OEM wins this quarter include Volkswagen in China launching its first Dolby Atmos vehicle, and Buick announcing presales for the Electra E7, a plug-in hybrid SUV with Dolby Atmos, also in China. Also this quarter, Google announced support for Dolby Atmos through Android Auto with launch partners including BMW, Genesis, Mahindra, Mercedes, Renault, and Skoda. With Dolby Atmos supported across Apple CarPlay and now Android, it has never been easier for users to stream Dolby Atmos to their car. It also makes it easier for dealers to demo and sell the Dolby Atmos experience in the car. We are excited about the continued momentum in car entertainment which continues to be a top focus for the industry. Moving on to user generated content and social media. High quality user generated content is an important factor in driving engagement. And we have strong adoption of Dolby Vision on many of the world's largest social media platforms. Like Instagram, Facebook, and Douyin. In addition to driving demand for Dolby on mobile phones, we are starting to make our way into new device categories, like smart glasses, and video cameras. Ray Neo, the leading provider of augmented reality glasses, launched the RayNeo GT Max, the world's first AR smart glasses equipped with Dolby Vision. And Insta360, the market share leader in action and panoramic cameras, launched the Luna Ultra, which supports Dolby Vision capture. We are pleased by the momentum behind user generated content in Dolby, and expect it to continue to grow as a priority for device OEMs. Wrapping up, we remain confident in our opportunity to drive growth beyond device licensing. With progress on both the video distribution program and Dolby OptiView. And we continue to bring more Dolby experiences to more people around the world with the growing adoption of Dolby Atmos and Dolby Vision across a wide range of devices and use cases. All of this gives us confidence in our ability to drive long term growth. With that, I would like to turn the call over to Robert to cover the financials. Robert J. Park: Thank you, Kevin, and thanks to everyone joining us on the call today, For the quarter came in at $305 million which was within the guidance we shared last quarter. We saw better than expected revenue in Dolby Atmos, Dolby Vision, and imaging patents, offset by deal timing and foundational audio revenue. Non GAAP earnings per share was $0.69, just above the middle of the range of guidance. As lower than expected operating expenses offset lower than expected revenue and higher tax Licensing revenue was $282 million and products and services revenue was $23 million. We generated approximately $167 million in operating cash flow and repurchased 1.2 million shares or $65 million of common stock. We recently received Board approval to increase the existing share-repurchase authorization by $350 million bringing our total authorization to about $427 million. We declared a $0.36 dividend up 9% from our dividend a year ago, and ended the quarter with cash and investments of $756 million Q3 GAAP operating expenses include a $4 million restructuring charge for organizational changes made as we align our resources to focus on the most impactful areas. Detailed licensing performance by end market can be found on our IR website. As a reminder, end market growth rates are typically smoother on an annual basis as the timing of recoveries, minimum volume commitments, and true ups could drive quarterly volatility. End market performance for the quarter came in mostly as expected with no significant outsized moves. Turning to guidance. For Q4 fiscal 2026, we expect revenue to be between $362 million to $392 million Within that, we expect licensing revenue to be between $335 million and $365 million. Gross margin should be approximately 90% on a non GAAP basis, and we expect non GAAP operating expenses to be between $195 million and $205 million Non GAAP earnings per share is expected to be between $1.13 to $1.28 Let me provide more context on Q4. Our Q4 revenue guidance at the midpoint represents a 23% year-over-year increase in revenue. This reflects momentum we are seeing in key growth areas we have been prioritizing, namely the video distribution patent program, Including a large deal with Meta that signed early in Q4. Higher units from Dolby Atmos in the car, revenue from new device categories like wearables. In addition, Q4 is also benefiting from timing of deals like minimum volume commitments. For fiscal year 2026, we expect total revenue to range from $1.41 billion to $1.44 billion Within that, licensing revenue is expected to be between $1.31 billion and $1.34 billion We are targeting non GAAP operating expenses to be between $785 million and $795 million. We expect non GAAP earnings per share To be between $4.25 and $4.40. This reflects the higher tax expense from discrete items in Q3. We are expecting an annual operating margin improvement of approximately 100-basis-points for the year on a non GAAP basis. Up from the range between 50-basis-points to 100-basis-points we guided to last quarter. For the full year, we are expecting other revenue to be up high teens driven by auto and VDP, Broadcast to be up mid single digits due to higher recoveries in imaging patents. Mobile, which includes wearables, is expected to be up mid single digits driven by adoption of Dolby Atmos and Dolby Vision. And CE should come in flattish with lower unit volumes offset by higher recoveries and Dolby Atmos adoption. PC is down low single digits primarily due to lower unit shipments and lower recoveries. We expect foundational audio revenue to be down slightly for the year Dolby Atmos, Dolby Vision, and imaging patents revenue to be up roughly 15% year-over-year. In summary, the team has executed well. And our performance reflects the operational focus on our key growth areas, despite an environment that has remained dynamic all year. As we have demonstrated over multiple economic cycles, our approach is to control what we can control. We remain focused on our growth strategy, driving innovation, and allocating resources to the areas that will have the greatest impact. Our financials remain solid with organic revenue growth, high gross margins, expanding operating margins, healthy cash flows, and a strong balance sheet. With that, I will turn it over to the operator to open the line for any questions. Operator? Operator: We will now begin the question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ralph Schackart with William Blair. Your line is open. Please go ahead. Ralph Schackart: Good afternoon. Thanks for taking the question. Robert, I want to circle back on your Q4 commentary with extra color. You talked about 23% year over year growth. You called out some momentum, I think, in, video distribution program. I think it was signed early in the quarter, building in-car and wearables. And historically, this business has been difficult for, at least for analysts to forecast on a quarterly basis, but that growth rate is sort of a standout, and I know you could have revenue sort of move in and move out of quarters. A little bit long winded, basically asked, can you talk about maybe the sustainability or durability of this growth rate? And how much of this could also be impacted by maybe some quarterly revenue shifting out of Q3 and Q4? Robert J. Park: Yeah. Hi, Ralph. Those are the areas driving the growth and the momentum we are seeing, both the VDP, including the large deal signed at the beginning of this quarter. Higher units from Dolby Atmos in the car and new device categories like wearables. But also mention that there are Q4 also benefits from timing of things like minimum volume commitments, particularly mobile that tend to be a little bit more back end loaded than they were last year. Last year's Q4 was a little softer if you look at the quarterization and just happens to be timing of certain things that come in. Ralph Schackart: Great. And then, you know, you had some large licensees on the VDP part, Meta, and I think you talked about Alibaba. Maybe talk about after signing these sort of, larger companies, what that does in terms of encouraging participation from future life licensees. They seem like pretty standout announcements this quarter. Kevin J. Yeaman: Yeah. Thanks, Ralph. It is, of the things that is giving us confidence in the program, and our long-term growth it is about a year into the program, and we have seen a lot of these programs come together. And this 1's coming together really well, both in terms of, you know, the pace of it and the breadth of it, We are at 45 licensors. We have got a number of high profile licensees, you mentioned Meta and Alibaba signing this quarter, And the impact that has is yeah it does tend to make it easier to get the next deals. You know, in any given point in time in a program like this, there is a group of customers that are looking for a solution to the problem of operating in a fragmented IP environment for which patent pools are very a very helpful solution. there is a group of companies that are doing their homework. They want to know is the is the pool comprehensive enough? Is it the right pool? Is it the right price? More people coming along starts to get them to move faster along their process. And then of course, any given program, there is always going to be some holdouts and you keep working each of those phases of the pipeline. But clearly, for, you know, 1 year, this program is coming along very nicely. And great to see some really nice wins this quarter. Ralph Schackart: Great. Thank you. Operator: Your next question comes from the line of Steven Frankel with Rosenblatt Securities. Your line is open. Please go ahead. Steven Frankel: Good afternoon. Thank you for the opportunity. Kevin, when you first introduced the concept of VDP, you talked about targeting some of the large domestic streaming networks. And Meta is a great win, and hopefully, we will get more like that. But what is the level of discussion with these targets in the streaming space today? And do you still feel like that is a realistic potential win on the horizon? Kevin J. Yeaman: Yeah. Thanks, Steve. Well, first of all, I yeah. I mean, Meta, 1 of the largest stream streamers of video content on the planet, and the pipeline is strong, and it includes streamers of all types of video content. And I am not gonna go into the details of the pool's discussion with any 1 customer, But again, I think for 1 year, we feel really good about how this program has come along. And every time you get another licensee on board, it makes it that much easier to get to get the next licensee. So we are, I mean, relative to a year ago, the way that the execution has gone, I would say we are feeling increasingly confident in that in that program. Steven Frankel: Great. And you know, given the strength in other, you know, auto seems to be continuing its ramp and you are announcing new customers and now you have expanded to Android auto. Are we getting closer to a point where the auto business might get broken out? Kevin J. Yeaman: Yes. We are getting closer. And as you know, we have, typically done that when it is 10% of licensing. And I think certainly as we go into the next year, that is something we are going to have a close look at because it is it is the highest growing end market for us and it is the largest within other. Great. Steven Frankel: And, Robert, a couple questions on the numbers. What were true ups? And were any of the buckets affected by large catch up payments. Robert J. Park: Yeah. The true up was really negligible this quarter, Steven. it is less than a million dollars positive. So really small. Steven Frankel: The second question regarding any true ups, we have gotten-- Recoveries. Robert J. Park: Yeah. Okay. Totally. Oh, nothing. No. As I noted on the call, not nothing notable this quarter. In terms of outsized movements. Okay. Steven Frankel: Great. And then, you know, from a macro perspective, there is been a lot of fear that the rising memory cost was going to impact how CE customers thought about new product introductions. You know, what can you tell us as you look to what is coming down the pipeline using your technology do you feel like the plans they talked about at CES are still going forward, or have they been impacted in any way? Robert J. Park: So I think, you know, CES, we were, you know, largely focusing on big focus areas for us at CES were automotive, where as you noted we continue to see really strong adoption, strong pipeline, things continue apace. We also were highlighting Dolby Vision 2.0 where we saw there are now Hisense customers that are that have Dolby Vision 2.0 on their TVs. And we are on track for the for them to have, and then Philips and TCL, by the end of this year. I think backing up, because memory is obviously a hot topic, Steven, I think as it relates to our end markets, mobile is by far the market that is impacted the most by memory prices. Our largest device market is TV. that is 1 of the lesser impacted markets in terms of a percentage of BOM. Second most impacted market would be PC in terms of the memory impact on them. So for this year, all that is factored into our guidance. As I have said before, it relates to mobile because of the prevalence of minimum volume commitments that has a kind of a mitigating or I guess you might even say sort of a delaying effect And so that is factored into our guidance. It kind of falls into the category. We have got some ups and we have got some downs. As we look into next year, the longer this goes on, the longer it starts to the more it starts to flow through. Now you know, we do expect to grow with strength in video distribution program, automotive, the new categories like wearables. We got some exciting new products coming in Dolby OptiView. But how much that is in part offset is, you know, memory chip is something we are watching closely. So again, TV is not affected as much. Mobile and PC the most. there is no uniform answer as to how that impacts Dolby. Each customer approaches this quite differently. So, you know, on the 1 hand, you might get customers that have room to absorb this into their gross margins, and that may not have any impact on unit volumes and so minimal impact to Dolby. Others are raising prices. Some are doing a combination, and we are raising prices. Then it really is a matter of how much pricing power do they have, what is the price sensitivity. But it is not necessarily a 1 for 1 impact on Dolby. And then in other cases, particularly in mobile where at the low end memory cost has gone from you know, my understanding is it is gone from plus or minus 15% to even over 50% of BOM. it is really significant. We are seeing some customers that are just eliminating 1 of their lower lines because they just cannot solve that equation. Then what they are doing is trying to get people to move up a level and they are also investing in trying to maintain those higher end lines. And so, again, that does in fact, of course, lowers device shipments. But on the other hand, for Dolby, it is not proportionate in the sense that we have a higher attach and we have higher technology content, the further you go up those lines. So it is very dynamic. We are watching it really closely. And again, we expect to grow with the strength we have in our focus areas, but we are definitely watching memory prices and how much an offset that might be. Steven Frankel: Great. Thank you so much. Operator: Your next question comes from the line of Patrick Sholl with Barrington Research. Your line is open. Please go ahead. Patrick Sholl: Hi. Thanks for taking the question. Within Dolby Vision 2, I was wondering if there was any sort of differentiation in terms of the pace of adoption between the various tiers on that new technology. Kevin J. Yeaman: I would say there is no change in pace from what we have talked about. We have got those 3 customers that Hisense has some of its in market TVs updated. We expect TCL and Philips to be shipping by the end of the year. We are kind of at that point in the year where I think that at CES will become the focal point for most of our customers that will be adopting it going forward. And on the content side, Canal plus and Peacock are both on track to they are integrating now and getting ready to be able to provide content in Dolby Vision 2.0. Patrick Sholl: Okay. And then on the VDP, is there like, is there a content type focus within that and like, and how you expect, like, the pace of getting licensees to be a part of that program, or is it kind of as you said, more certainly, I understand it is more broad, but is how you are seeking this to generate growth on that, focusing on a specific, like, type of content? Initially first. Kevin J. Yeaman: Really, at the center of it is, companies that are, at scale, taking advantage of the best in video codec technologies in order to, achieve their business objectives. And that is a broad range of content. You can tell from some of our first licensees from Meta to Roku, ByteDance to, Alibaba's coverage includes including ecommerce. So it really is a function of anybody who is relying on the IP covered by this patent pool, growing with more licensors joining with the success it is had over the last year. To deliver video at scale. Patrick Sholl: Okay. Thank you. Operator: Your next question comes from the line of John Rigatti with Baird. Your line is open. Please go ahead. John Rigatti: Hi. Thanks for the question. This is John on for Vikram Kesavabhotla. A couple for me. I wanted to start with auto. I would be interested to hear if you could unpack what is driven what you think has driven some of the faster adoption with your technology and some of the international autos, and then what needs to change in the US market for you to be able to unlock more of that segment there? And I have a couple of follow ups. Kevin J. Yeaman: Yeah. I think I mean, I think, you know, if I go back to the beginning of the program, a lot of our initial momentum was in China where they were becoming the, you know, the leading innovators in EVs, and they were putting a really high focus on the in car entertainment experience. And China is also happens to be the largest vehicle market in the world, and so that got the attention of auto manufacturers around the world to be able to compete in China at which point then it makes it just you are just a step away from then shipping those cars throughout, throughout the world. And so that is what you know, and so in Europe, we have got Mercedes and BMW. In India, we now have Mahindra and Tata. The US, we do have Cadillac So I think well, I mean, we are pleased with how the pace and how it is grown. Like I said, 40 OEMs in, since the program began. And I think know, the next big milestone for us is looking to get further penetration in the mainstream. And, you know, we have got we have talked about some cars in the past, like the Hyundai in China and some of the cars in India. But people always start with the high end, and now it is a matter of really focusing on getting that into the mainstream higher volume models. And that will benefit us in the US and around the world. Yeah. Great. John Rigatti: And then maybe on OptiView, if you could talk a little bit more just about the vision there. And, obviously, it is still very early days, but just some of the a couple examples on maybe what is resonating most as you have taken that out to partners. Kevin J. Yeaman: Yeah. Thank you. So, look, at the highest level, the vision is this. Which is that we are no longer in a world of 1 to many where we all have to experience the exact same sports experience at the exact same time. We are a world of streaming where we ought to be able to understand what engages you and be able to personalize that experience and to do that in real time in a way where you can interact with your friends around the experience. So the vision for Dolby OptiView is to provide a solution that allows these sports organizations and streamers, to be able to do that. And so, we started, of course, with the ability to stream in ultra low latency. that is important so that you are not seeing the touchdown you know, 15 seconds before I am, which is no fun for either of us. Maybe it is fun for you. it is not fun for me. The we have got a player that is integrated with that. And we have some now you are beginning to see some new additions to the portfolio which get closer to that more personalized experience. So 1 of the things I talked about today was, OptiView ads. Which is something we mentioned a couple of quarters ago. But we have now been in market with the first couple of customers. They are in the process of testing the third generation of the product. And once that testing is complete, we are planning to really begin to scale this to our customer base in the fall. And the big difference there from the customer perspective is the revenue generation potential. 1 of our customers is seeing increases of 75%. it is because we have a server-guided technology which requires far less lead time than competing solutions to kind of pick the ad and deliver which means that by filling that ad slot just before it is needed, we can do a better job of targeting that ad to the viewer, it is more likely that the viewer is still there, and ultimately just increase fill rate. So and then the solution is also integrated with the player and that prevents the ads from being blocked. So we are pretty excited about that. As I said, it became 1 of the well, the first at the time was the first technology to be certified by Google Ad Manager as a partner technology. And that is because it is designed to slot right into their workflows and work seamlessly with Google Ad Manager. So as we get to the fall and are looking to scale this, we are also looking forward to working with them. To highlight the benefits to their customers. And then, I talked about last quarter about how at NAB we were previewing our sports intelligence platform. And so we continue to get really good engagement from customers on what we are doing with that. We look forward to having some specific solutions in market next year. And this is really focused on now moving toward really being able to understand how engaged a fan is or when their interest is waning. But importantly, being able to do something about that with the audio visual experience that keeps them engaged. So again, the vision is simply to, provide our customers with the ability to better engage their fans and audiences with real time personalized experiences. And we are really excited about how the portfolio of solutions is coming together to make that happen. Yeah. that is great. Thank you. John Rigatti: I guess the last ones for me is just you touched a little bit on the Dolby Vision 2.0 and some of what is obviously in market now. Some of the demand you are seeing there. I would be interested if you could talk a little bit as well about the impact that Dolby Vision 2.0 being in the market is having on adoption of Dolby Vision 1. Possibly kind of the segmentation or the tiering that OEMs are able to do across both of those. And then also, maybe just for Robert on capital allocation. If I look at kind of the repurchase activity on a quarterly basis, it looks like so far in 2026, you are going at about 2x the rate of 2025. Just any kind of color you could give on how you are thinking about capital allocation for the balance of this year? And then going forward would be great. Thank you. Kevin J. Yeaman: Yeah. I think, so as it relates to Dolby Vision 2, I would say it is early days. I mean, again, we are focused on getting these first 3 customers in market and these are all examples where they are moving from Dolby Vision to Dolby Vision 2.0 as you would expect starting with some of their higher end. We do have strong engagement. And like I said, I think you know, CES is probably about the time we would expect for, our customers to say more about their go-forward plans with Dolby Vision 2.0. And, Robert, do you want to add anything? Yeah. Robert J. Park: Hey. Hi, John. Yeah. Thanks for noticing that, yeah, we have increased the velocity and volume of our buyback activity, and we will continue to do execute our policy of at least offsetting dilution of stock based comp. But we do look at this quarterly, make our decisions quarterly based on facts and circumstances and needs of the business. But, yes, we have been stepping up year to date. John Rigatti: Okay, every quarter. Great. Thank you, guys. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Dolby Laboratories, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dolby Laboratories wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Dolby Laboratories. The Motley Fool has a disclosure policy. Dolby (DLB) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is aggressively shifting focus toward content platforms and usage-based revenue, targeting 10% of total revenue from these partners by fiscal year 2028. The Video Distribution Program (VDP) is gaining rapid traction as a solution for fragmented IP environments, securing major licensees like Meta and Alibaba within its first year. Automotive momentum is driven by a 'China-first' strategy where EV innovation and high focus on in-car entertainment are now influencing global OEM adoption across Europe and India. Dolby OptiView is evolving from a low-latency streaming tool into a comprehensive fan engagement platform, utilizing AI to predict viewer behavior and personalize live sports experiences. User-generated content (UGC) is emerging as a critical growth driver, with Dolby Vision expanding from social media platforms into new hardware categories like AR smart glasses and action cameras. The company attributes its Q4 growth outlook to the successful execution of high-priority initiatives, specifically the VDP and increased Dolby Atmos penetration in the automotive sector. Q4 revenue guidance assumes a 23% year-over-year increase, heavily weighted by the timing of a large Meta deal and back-end loaded minimum volume commitments in mobile. Management expects annual operating margin improvement of approximately 100 basis points for fiscal 2026, reflecting disciplined resource allocation toward high-impact growth areas. The company anticipates automotive revenue will eventually be broken out as a separate reporting segment once it consistently reaches 10% of total licensing revenue. Guidance factors in potential headwinds from rising memory costs, which may impact lower-end mobile device shipments, though Dolby expects to mitigate this through higher attach rates on premium models. The rollout of Dolby Vision 2.0 is expected to accelerate following the upcoming CES, with TCL and Philips scheduled to ship compatible televisions by the end of the calendar year. A $4 million restructuring charge was recorded in Q3 to align organizational resources with the most impactful strategic growth areas. Memory price volatility is identified as a dynamic risk, particularly for mobile and PC markets, where high costs may lead OEMs to eliminate lower-tier product lines. The Board approved a $350 million increase to the share-repurchase authorization, signaling confidence in the balance sheet and a commitment to offsetting dilution. Foundational audio revenue is expected to be down slightly for the full year, contrasting with the projected 15% growth in Dolby Atmos, Dolby Vision, and imaging patents. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while VDP and automotive provide durable momentum, the Q4 spike is partially due to the timing of large deals and minimum volume commitments. The growth rate also reflects a favorable comparison against a softer Q4 in the prior fiscal year. Mobile and PC are the most exposed; some mobile OEMs are eliminating low-end lines where memory has risen from 15% to over 50% of the bill of materials. Dolby is partially insulated because it has higher technology attach rates and higher per-unit revenue on the premium devices that OEMs are prioritizing. The ad engine uses server-guided technology to fill ad slots just before delivery, which has increased fill rates and revenue by up to 75% for early customers. Certification by Google Ad Manager is expected to facilitate scaling the product to a broader customer base starting in the fall. Securing 'at scale' video streamers validates the pool's price and comprehensiveness, making it easier to convert 'holdout' companies in the pipeline. The program is intended to solve the problem of operating in a fragmented IP environment for any company delivering video at scale.

SAN FRANCISCO, July 30, 2026 /PRNewswire/ -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's financial results for the third quarter of fiscal 2026. "We continue to execute against our full-year objectives, and we are building momentum across several of our key growth areas," said Kevin Yeaman, President and CEO, Dolby Laboratories. "We are expanding our total addressable market and creating new opportunities with content partners through the Video Distribution Program and Dolby OptiView, and we continue to bring Dolby Atmos and Dolby Vision to more experiences from live sports, to music in the car, to user-generated content on mobile devices and more." Third Quarter Fiscal 2026 Financial Highlights Total revenue was $305 million, compared to $316 million for the third quarter of fiscal 2025. GAAP net income was $29 million or $0.30 per diluted share, compared to GAAP net income of $46 million or $0.48 per diluted share for the third quarter of fiscal 2025. On a non-GAAP basis, third quarter net income was $65 million or $0.69 per diluted share, compared to $76 million or $0.78 per diluted share for the third quarter of fiscal 2025. Dolby repurchased 1.2 million shares of its common stock for approximately $65 million. A complete listing of Dolby's non-GAAP measures is described and reconciled to the corresponding GAAP measures at the end of this release. Recent Business Highlights The 2026 FIFA World Cup was shown in Dolby Atmos and/or Dolby Vision across broadcast, streaming, and pay TV, including Peacock and Comcast in the U.S., Bell TV in Canada, and TV GLOBAL in Brazil. On TVs, Dolby Vision 2 is now in market with some Hisense TVs, and by the end of this calendar year, TCL and Philips will also be shipping TVs with Dolby Vision 2. RayNeo, the leading provider of augmented reality glasses, launched the RayNeo GT Max, the first AR smart glasses supporting Dolby Vision. Insta360, a leader in the action and panoramic cameras segments, launched the Luna Ultra, which supports Dolby Vision capture. Google announced support for Dolby Atmos through Android Auto with partners including BMW, Genesis, Mahindra, Mercedes, Renault, and Skoda. Roberts Communications Network, the largest horse racing streaming provider in the U.S., is using Dolby OptiView for ultra-low latency video streaming for horse racing. Access Advance announced that Meta Platforms, Inc., one of the world's largest distributors of video content, joined the VDP program as a licensee. Dividend Today, Dolby announced a cash dividend of $0.36 per share of Class A and Class B common stock, payable on August 19, 2026, to stockholders of record as of the close of business on August 11, 2026. Stock Repurchase Program Today, Dolby also announced that its Board of Directors has approved increasing the size of its stock repurchase program by $350 million, bringing the amount available for future repurchases of its Class A Common Stock to approximately $427 million. Stock repurchases under this program may be made through open market transactions, negotiated purchases, or otherwise, at times and in amounts that the company considers appropriate. Financial Outlook Dolby's financial outlook relies, in part, on estimates of royalty-based revenue that take into consideration various factors that are subject to uncertainty, including consumer demand for electronic products. In addition, actual results could differ materially from the estimates Dolby is providing herein due in part to uncertainty resulting from the macroeconomic effect of certain conditions, including developments concerning trade restrictions and changes in trade or diplomatic relationships, supply chain constraints, international conflicts, geopolitical instability, and fluctuations in inflation and interest rates. The uncertainty resulting from these factors has greatly reduced visibility into Dolby's future outlook. To the extent possible, the estimates Dolby is providing for future periods reflect certain assumptions about the potential impact of certain of these items, based upon a consideration of currently available external and internal data and information. These assumptions are subject to risks and uncertainties. For more information, see "Forward-Looking Statements" in this press release for a description of certain risks that Dolby faces, and the section captioned "Risk Factors" in its Quarterly Report on Form 10-Q for the third quarter of fiscal 2026, to be filed on or around the date hereof. Dolby is providing the following estimates for its fourth quarter of fiscal 2026: Total revenue is expected to range from $362 million to $392 million. Licensing revenue is expected to range from $335 million to $365 million. Gross margins are anticipated to be approximately 88% on a GAAP basis and approximately 90% on a non-GAAP basis. Operating expenses are anticipated to range from $227 million to $237 million on a GAAP basis and from $195 million to $205 million on a non-GAAP basis. Effective tax rate is anticipated to be around 23% on a GAAP basis and around 21% on a non-GAAP basis. Diluted earnings per share is anticipated to range from $0.78 to $0.93 on a GAAP basis and from $1.13 to $1.28 on a non-GAAP basis. Dolby is providing the following estimates for the full year of fiscal 2026: Total revenue is expected to range from $1.41 billion to $1.44 billion. Licensing revenue is expected to range from $1.31 billion to $1.34 billion. Gross margins are anticipated to be approximately 88% on a GAAP basis and approximately 90% on a non-GAAP basis. Operating expenses are anticipated to range from $937 million to $947 million on a GAAP basis and from $785 million to $795 million on a non-GAAP basis. Dolby expects operating margins to be approximately 21% on a GAAP basis and to be approximately 34% on a non-GAAP basis. Effective tax rate is anticipated to be around 24% on a GAAP basis and around 21% on a non-GAAP basis. Diluted earnings per share is anticipated to range from $2.62 to $2.77 on a GAAP basis and from $4.25 to $4.40 on a non-GAAP basis. Conference Call Information Members of Dolby management will lead a conference call open to all interested parties to discuss third quarter fiscal 2026 financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, July 30, 2026. The conference call can be accessed by registering online at Dolby Laboratories Q3 Fiscal Year 2026 Financial Results, at which time registrants will receive dial-in information as well as a conference ID. A live audio webcast of the conference call will be available at http://investor.dolby.com where it will be archived for one year. Non-GAAP Financial Information To supplement Dolby's financial statements presented on a GAAP basis, Dolby management uses, and Dolby provides to investors, certain non-GAAP financial measures as an additional tool to evaluate Dolby's operating results in a manner that focuses on what Dolby's management believes to be its ongoing business operations and performance. We believe these non-GAAP financial measures are also helpful to investors in enabling comparability of operating performance between periods and among peer companies. Additionally, Dolby's management regularly uses our supplemental non-GAAP financial measures to make operating decisions, for planning and forecasting purposes and determining bonus payouts. Specifically, Dolby excludes the following as adjustments from one or more of its non-GAAP financial measures: Stock-based compensation expense: Stock-based compensation, unlike cash-based compensation, utilizes subjective assumptions in the methodologies used to value the various stock-based award types that Dolby grants. These assumptions may differ from those used by other companies. To facilitate more meaningful comparisons between its underlying operating results and those of other companies, Dolby excludes stock-based compensation expense. Amortization of acquisition-related intangibles: Dolby amortizes intangible assets acquired in connection with business combinations. These intangible assets consist of patents and technology, customer relationships, and other intangibles. Dolby records amortization charges relating to these intangible assets in its GAAP financial statements, and Dolby views these charges as items arising from pre-acquisition activities that are determined by the timing and valuation of its acquisitions. As these amortization charges do not directly correlate to its operations during any particular period, Dolby excludes these charges to facilitate an evaluation of its current operating performance and comparisons to its past operating results. In addition, while amortization expense of acquisition-related intangible assets is excluded from Non-GAAP Net Income, the revenue generated from those assets is not excluded. Restructuring charges or credits: Restructuring charges are costs associated with restructuring plans and primarily relate to costs associated with exit or disposal activities, employee severance benefits, and asset impairments. Dolby excludes restructuring costs, including any adjustments to charges recorded in prior periods (which may be credits), as Dolby believes that these costs are not representative of its normal operating activities and therefore, excluding these amounts enables a more effective comparison of its past operating performance and to that of other companies. Income tax adjustments: The income tax effects of the aforementioned non-GAAP adjustments do not directly correlate to its operating performance so Dolby believes that excluding such income tax effects provides a more meaningful view of its underlying operating results to management and investors. Using the aforementioned adjustments, Dolby provides various non-GAAP financial measures including, but not limited to: non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, and non-GAAP effective tax rate. Dolby's management believes it is useful for itself and investors to review both GAAP and non-GAAP measures to assess the performance of Dolby's business, including as a means to evaluate period-to-period comparisons. Dolby's management does not itself, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, superior to, or as a substitute for, financial information prepared in accordance with GAAP. Whenever Dolby uses non-GAAP financial measures, it provides a reconciliation of the non-GAAP financial measures to the most closely applicable GAAP financial measures. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures as detailed above and below. Investors are also encouraged to review Dolby's GAAP financial statements as reported in its US Securities and Exchange Commission (SEC) filings. A reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release and on the Dolby investor relations website, http://investor.dolby.com. Forward-Looking Statements Certain statements in this press release and in our earnings calls, including, but not limited to, expected financial results for the fourth quarter of fiscal 2026 and full year fiscal 2026, Dolby's ability to expand existing business, navigate challenging periods, pursue its long-term growth opportunities, and advance its other long-term objectives are "forward-looking statements" that inherently involve substantial risks and uncertainties. These forward-looking statements are based on management's current expectations, and as a result of certain risks and uncertainties, actual results may differ materially from those provided. The following important factors, without limitation, could cause actual results to differ materially from those in the forward-looking statements: the potential impacts of economic conditions on Dolby's business operations, financial results, and financial position (including the impact to Dolby partners and disruption of the supply chain and delays in shipments of consumer products; the level at which Dolby technologies are incorporated into products and the consumer demand for such products; delays in the development and release of new products or services that contain Dolby technologies; delays in royalty reporting or delinquent payment by partners or licensees; lengthening sales cycles; the impact to the overall cinema market including adverse impact to Dolby's revenue recognized on box-office sales and demand for cinema products and services; and macroeconomic conditions that affect discretionary spending and access to products that contain Dolby technologies); risks associated with geopolitical issues and international conflicts; risks associated with trends in the markets in which Dolby operates, including the broadcast, mobile, consumer electronics, PC, and other markets; the loss of, or reduction in sales by, a key customer, partner, or licensee; pricing pressures; risks relating to changing trends in the way that content is distributed and consumed; risks relating to conducting business internationally, including trade restrictions and changes in diplomatic or trade relationships; risks relating to maintaining patent coverage; the timing of Dolby's receipt of royalty reports and payments from its licensees, including recoveries; changes in tax regulations; timing of revenue recognition under licensing agreements and other contractual arrangements; Dolby's ability to develop, maintain, and strengthen relationships with industry participants; Dolby's ability to develop and deliver innovative products and technologies in response to new and growing markets; competitive risks; risks associated with conducting business in countries that have historically limited recognition and enforcement of intellectual property and contractual rights; risks associated with the health of the motion picture and cinema industries generally; Dolby's ability to increase its revenue streams and to expand its business generally, and to continue to expand its business beyond its current technology offerings; risks associated with acquiring and successfully integrating businesses or technologies; and other risks detailed in Dolby's SEC filings and reports, including the risks identified under the section captioned "Risk Factors" in its Quarterly Report on Form 10-Q filed on or around the date hereof. Dolby may not actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements. Forward-looking statements are based upon information available to us as of the date of such statements, and while Dolby believes such information forms a reasonable basis for such statements, such information may be limited or incomplete. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, Dolby disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise. About Dolby Dolby Laboratories (NYSE: DLB) is a world leader in immersive entertainment. From movies and TV, to music, sports, gaming, and beyond, Dolby transforms the science of sight and sound into spectacular experiences for billions of people worldwide across all their favorite devices. We partner with artists, storytellers, and the brands you love to transform entertainment and digital experiences through groundbreaking innovations like Dolby Atmos, Dolby Vision, Dolby Cinema, and Dolby OptiView. Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby OptiView, and the double-D symbol are among the registered and unregistered trademarks of Dolby Laboratories in the United States and/or other countries. Other trademarks remain the property of their respective owners. Investor Contact:Peter [email protected] Media Contact:[email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/dolby-laboratories-reports-third-quarter-2026-financial-results-302839283.html

Dolby Laboratories (DLB) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.99%. A quarter ago, it was expected that this creator and licensor of audio, video and voice technologies would post earnings of $1.31 per share when it actually produced earnings of $1.37, delivering a surprise of +4.58%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Dolby Laboratories, which belongs to the Zacks Audio Video Production industry, posted revenues of $305 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.79%. This compares to year-ago revenues of $315.55 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Dolby Laboratories shares have lost about 18.2% since the beginning of the year versus the S&P 500's gain of 6.9%. While Dolby Laboratories has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Dolby Laboratories was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.21 on $347.46 million in revenues for the coming quarter and $4.31 on $1.4 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Audio Video Production is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. LiveOne (LVO), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.24 per share in its upcoming report, which represents a year-over-year change of +40%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. LiveOne's revenues are expected to be $21.71 million, up 13% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dolby Laboratories (DLB) : Free Stock Analysis Report LiveOne, Inc. (LVO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research