Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's
financial results for the second quarter of fiscal 2023.
"In the first half of the year, we continued to bring Dolby
Atmos and Dolby Vision to more consumers across our movies and TV,
music and user-generated content ecosystems," said Kevin Yeaman,
President and CEO, Dolby Laboratories. "We remain focused on our
long-term growth opportunities and bringing Dolby to all the ways
people experience their content."
Second Quarter Fiscal 2023 Financial
Highlights
- Total revenue was $375.9 million, compared to $334.4 million
for the second quarter of fiscal 2022.
- GAAP net income was $95.7 million, or $0.98 per diluted share,
compared to GAAP net income of $36.7 million, or $0.36 per diluted
share, for the second quarter of fiscal 2022. On a non-GAAP basis,
second quarter net income was $122.6 million, or $1.26 per diluted
share, compared to $94.0 million, or $0.92 per diluted share, for
the second quarter of fiscal 2022.
- Cash flow from operations was $104.5 million, compared to $63.0
million for the second quarter of fiscal 2022.
- Dolby repurchased 0.6 million shares of its common stock and
ended the quarter with approximately $262 million of stock
repurchase authorization available going forward.
A complete listing of Dolby's non-GAAP measures are described
and reconciled to the corresponding GAAP measures at the end of
this release.
Recent Business Highlights
- Sonos launched their premium smart speaker, the Sonos Era 300,
with Dolby Atmos.
- Guangzhou Automobile Group, the fourth largest auto
manufacturer in China, announced they are launching Dolby Atmos in
their new sport sedan, the AION Hyper GT.
- OPPO launched their flagship phone with Dolby Vision
Capture.
- Xiaomi now has multiple Dolby Vision Capture phone models in
China and started shipping phones to India, Southeast Asia, Europe,
and the Middle East.
- Weibo, one of China’s largest social media platforms, now
supports Dolby Vision and Dolby Atmos joining WeChat, Bilibili, and
QQ.
Dividend
Today, Dolby announced a cash dividend of $0.27 per share of
Class A and Class B common stock, payable on May 23, 2023, to
stockholders of record as of the close of business on May 16,
2023.
Financial Outlook
Dolby’s financial outlook relies on estimates of royalty-based
revenue that take into consideration the macroeconomic effect of
certain events, including supply chain constraints, the long-term
impact of the COVID-19 pandemic, and consumer demand for electronic
products. In addition, its actual results could differ materially
from the estimates Dolby is providing below due in part to the
increased uncertainty resulting from these items as well as the
geopolitical instability and continuing concerns around inflation
and rising interest rates. The uncertainty resulting from these
factors has greatly reduced its visibility into its 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 second quarter of fiscal 2023, to be filed on or
around the date hereof.
Dolby is providing the following high-level estimates for the
full year of fiscal 2023:
- Total revenue is expected to range from $1.27 billion to $1.33
billion.
- Gross margin percentages are anticipated to be roughly 88% on a
GAAP basis and on a non-GAAP basis.
- GAAP operating expenses are expected to decline roughly 2%
year-over-year. Non-GAAP operating expenses are expected to grow
roughly 2% year-over-year.
- Dolby expects operating margins on a GAAP basis to be roughly
19% and on a non-GAAP basis to be roughly 30%.
- Diluted earnings per share is anticipated to range from $2.01
to $2.51 on a GAAP basis and from $3.15 to $3.65 on a non-GAAP
basis.
Dolby is providing the following estimates for its third quarter
of fiscal 2023:
- Total revenue is estimated to range from $285 million to $315
million.
- Gross margin percentages are estimated to be roughly 86% on a
GAAP basis and 86% to 87% 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 range from 22% to 24% on a
GAAP basis and 19% to 21% on a non-GAAP basis.
- Diluted earnings per share is anticipated to range from $0.18
to $0.33 on a GAAP basis and from $0.47 to $0.62 on a non-GAAP
basis.
Conference Call Information
Members of Dolby management will lead a conference call open to
all interested parties to discuss second quarter fiscal 2023
financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m.
ET) on Thursday, May 4, 2023. Access to the teleconference
will be available at http://investor.dolby.com or by dialing
1-888-210-2212 (or dialing +1-646-960-0390 for international
callers) and entering confirmation code 5587811.
A replay of the call will be available from 5:00 p.m. PT (8:00
p.m. ET) on Thursday, May 4, 2023, until 8:59 p.m. PT on
Thursday, May 11, 2023 (11:59 p.m. ET) by dialing 1-800-770-2030
(international callers can access the replay by dialing
+1-647-362-9199) and entering the confirmation code 5587811. An
archived version of the teleconference will also be available on
the Dolby website, http://investor.dolby.com.
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. 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 acquisitions. 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.
Other operating income adjustments: In the second quarter of
fiscal 2022, Dolby recorded an expense of $34.4 million related to
a one-time settlement and accrual in connection with
indemnification requests under commercial agreements that we
assumed in an acquisition in 2014 related to our Cinema products
business. Dolby expects this settlement and related accrual to
fully resolve this matter. Dolby has excluded this item as it is an
unusual, non-recurring event that is not representative of Dolby’s
normal operating activities and therefore, excluding this amount
enables a more effective comparison to Dolby’s past operating
performance.
Restructuring charges/(credits): Restructuring
charges/(credits) 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 to its past operating performance.
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, including, but not
limited to, expected financial results for the third quarter of
fiscal 2023 and full year fiscal 2023, its ability to expand
existing business, navigate challenging periods, pursue its
long-term growth opportunities, and advance its other long-term
objectives, and future dividend payments 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,
such as the conflict between Russia and Ukraine; 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 China and other 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 this press release, 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. 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 Laboratories
Dolby Laboratories (NYSE: DLB) is based in San
Francisco, California with offices around the globe. From movies
and TV shows, to apps, music, sports and gaming, Dolby transforms
the science of sight and sound into spectacular experiences for
billions of people worldwide. Dolby partners with artists,
storytellers, developers, and businesses to revolutionize
entertainment and communications with Dolby Atmos,
Dolby Vision, Dolby Cinema, and Dolby.io.
Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby.io, 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.
DOLBY LABORATORIES,
INC.INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share amounts;
unaudited)
|
|
Fiscal Quarter Ended |
|
Fiscal Year-To-Date Ended |
|
|
March 31,2023 |
April 1,2022 |
|
March 31,2023 |
April 1,2022 |
Revenue: |
|
|
|
|
|
|
Licensing |
|
$ |
351,608 |
|
$ |
313,833 |
|
|
$ |
659,619 |
|
$ |
646,117 |
|
Products and services |
|
|
24,283 |
|
|
20,538 |
|
|
|
51,193 |
|
|
39,887 |
|
Total revenue |
|
|
375,891 |
|
|
334,371 |
|
|
|
710,812 |
|
|
686,004 |
|
|
|
|
|
|
|
|
Cost of
revenue: |
|
|
|
|
|
|
Cost of licensing |
|
|
21,365 |
|
|
16,672 |
|
|
|
34,724 |
|
|
31,607 |
|
Cost of products and services |
|
|
19,684 |
|
|
18,843 |
|
|
|
40,775 |
|
|
36,617 |
|
Total cost of revenue |
|
|
41,049 |
|
|
35,515 |
|
|
|
75,499 |
|
|
68,224 |
|
|
|
|
|
|
|
|
Gross
profit |
|
|
334,842 |
|
|
298,856 |
|
|
|
635,313 |
|
|
617,780 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Research and development |
|
|
67,951 |
|
|
67,421 |
|
|
|
132,401 |
|
|
136,245 |
|
Sales and marketing |
|
|
95,695 |
|
|
84,230 |
|
|
|
177,900 |
|
|
181,400 |
|
General and administrative |
|
|
61,939 |
|
|
98,693 |
|
|
|
121,911 |
|
|
161,137 |
|
Restructuring charges/(credits) |
|
|
33 |
|
|
5,162 |
|
|
|
(211 |
) |
|
5,067 |
|
Total operating expenses |
|
|
225,618 |
|
|
255,506 |
|
|
|
432,001 |
|
|
483,849 |
|
|
|
|
|
|
|
|
Operating
income |
|
|
109,224 |
|
|
43,350 |
|
|
|
203,312 |
|
|
133,931 |
|
|
|
|
|
|
|
|
Other
income/(expense): |
|
|
|
|
|
|
Interest income |
|
|
6,773 |
|
|
1,098 |
|
|
|
11,651 |
|
|
1,814 |
|
Interest expense |
|
|
34 |
|
|
(87 |
) |
|
|
(47 |
) |
|
(171 |
) |
Other income/(expense), net |
|
|
1,250 |
|
|
(910 |
) |
|
|
2,347 |
|
|
(681 |
) |
Total other income |
|
|
8,057 |
|
|
101 |
|
|
|
13,951 |
|
|
962 |
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
117,281 |
|
|
43,451 |
|
|
|
217,263 |
|
|
134,893 |
|
Provision for income taxes |
|
|
(21,398 |
) |
|
(6,932 |
) |
|
|
(41,932 |
) |
|
(18,364 |
) |
Net income including
noncontrolling interest |
|
|
95,883 |
|
|
36,519 |
|
|
|
175,331 |
|
|
116,529 |
|
Less: net (income)/loss attributable to noncontrolling
interest |
|
|
(187 |
) |
|
201 |
|
|
|
(260 |
) |
|
205 |
|
Net income attributable
to Dolby Laboratories, Inc. |
|
$ |
95,696 |
|
$ |
36,720 |
|
|
$ |
175,071 |
|
$ |
116,734 |
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
Basic |
|
$ |
1.00 |
|
$ |
0.36 |
|
|
$ |
1.83 |
|
$ |
1.15 |
|
Diluted |
|
$ |
0.98 |
|
$ |
0.36 |
|
|
$ |
1.80 |
|
$ |
1.13 |
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
Basic |
|
|
95,820 |
|
|
101,343 |
|
|
|
95,862 |
|
|
101,285 |
|
Diluted |
|
|
97,298 |
|
|
102,707 |
|
|
|
97,392 |
|
|
103,477 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DOLBY LABORATORIES,
INC.INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands; unaudited)
|
|
March 31,2023 |
September 30,2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
|
$ |
688,443 |
|
$ |
620,127 |
|
Restricted cash |
|
|
4,977 |
|
|
8,244 |
|
Short-term investments |
|
|
126,393 |
|
|
189,213 |
|
Accounts receivable, net |
|
|
283,315 |
|
|
243,593 |
|
Contract assets, net |
|
|
275,262 |
|
|
176,093 |
|
Inventories, net |
|
|
30,353 |
|
|
23,549 |
|
Prepaid expenses and other current assets |
|
|
53,853 |
|
|
50,075 |
|
Total current assets |
|
|
1,462,596 |
|
|
1,310,894 |
|
Long-term investments |
|
|
100,797 |
|
|
102,514 |
|
Property, plant, and equipment, net |
|
|
508,021 |
|
|
513,481 |
|
Operating lease right-of-use assets |
|
|
44,721 |
|
|
46,530 |
|
Goodwill and intangible assets, net |
|
|
469,010 |
|
|
477,412 |
|
Deferred taxes |
|
|
203,886 |
|
|
183,568 |
|
Other non-current assets |
|
|
47,102 |
|
|
55,149 |
|
Total
assets |
|
$ |
2,836,133 |
|
$ |
2,689,548 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
|
$ |
17,170 |
|
$ |
14,171 |
|
Accrued liabilities |
|
|
246,757 |
|
|
230,237 |
|
Income taxes payable |
|
|
14,496 |
|
|
1,265 |
|
Contract liabilities |
|
|
22,963 |
|
|
18,588 |
|
Operating lease liabilities |
|
|
12,625 |
|
|
13,257 |
|
Total current liabilities |
|
|
314,011 |
|
|
277,518 |
|
Non-current contract liabilities |
|
|
22,721 |
|
|
23,203 |
|
Non-current operating lease liabilities |
|
|
35,243 |
|
|
37,685 |
|
Other non-current liabilities |
|
|
108,166 |
|
|
100,122 |
|
Total liabilities |
|
|
480,141 |
|
|
438,528 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Class A common stock |
|
|
54 |
|
|
53 |
|
Class B common stock |
|
|
41 |
|
|
41 |
|
Retained earnings |
|
|
2,378,115 |
|
|
2,297,730 |
|
Accumulated other comprehensive loss |
|
|
(27,426 |
) |
|
(51,641 |
) |
Total stockholders’ equity –
Dolby Laboratories, Inc. |
|
|
2,350,784 |
|
|
2,246,183 |
|
Noncontrolling interest |
|
|
5,208 |
|
|
4,837 |
|
Total stockholders’ equity |
|
|
2,355,992 |
|
|
2,251,020 |
|
Total liabilities and
stockholders’ equity |
|
$ |
2,836,133 |
|
$ |
2,689,548 |
|
|
DOLBY LABORATORIES,
INC.INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in thousands; unaudited)
|
|
Fiscal Year-To-Date Ended |
|
|
March 31,2023 |
April 1,2022 |
Operating
activities: |
|
|
|
Net income including noncontrolling interest |
|
$ |
175,331 |
|
$ |
116,529 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
|
40,388 |
|
|
45,832 |
|
Stock-based compensation |
|
|
61,067 |
|
|
60,355 |
|
Amortization of operating lease right-of-use assets |
|
|
6,565 |
|
|
7,953 |
|
Amortization of premium on investments |
|
|
37 |
|
|
673 |
|
Provision for/(benefit from) credit losses |
|
|
(2,072 |
) |
|
2,333 |
|
Deferred income taxes |
|
|
(19,544 |
) |
|
(19,363 |
) |
Other non-cash items affecting net income |
|
|
(4,417 |
) |
|
560 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
|
|
(37,769 |
) |
|
3,498 |
|
Contract assets, net |
|
|
(99,162 |
) |
|
(76,447 |
) |
Inventories |
|
|
(4,728 |
) |
|
(5,045 |
) |
Operating lease right-of-use assets |
|
|
(2,643 |
) |
|
(265 |
) |
Prepaid expenses and other assets |
|
|
12,943 |
|
|
(1,683 |
) |
Accounts payable and accrued liabilities |
|
|
21,609 |
|
|
(37,472 |
) |
Income taxes, net |
|
|
17,370 |
|
|
5,117 |
|
Contract liabilities |
|
|
3,852 |
|
|
4,364 |
|
Operating lease liabilities |
|
|
(5,415 |
) |
|
(7,924 |
) |
Other non-current liabilities |
|
|
(2,475 |
) |
|
(4,356 |
) |
Net cash provided by operating
activities |
|
|
160,937 |
|
|
94,659 |
|
|
|
|
|
Investing
activities: |
|
|
|
Purchases of marketable securities |
|
|
(80,561 |
) |
|
(201,231 |
) |
Proceeds from sales of marketable securities |
|
|
52,345 |
|
|
5,107 |
|
Proceeds from maturities of marketable securities |
|
|
94,843 |
|
|
29,055 |
|
Return of investment from equity method investees |
|
|
— |
|
|
826 |
|
Purchases of property, plant, and equipment |
|
|
(14,741 |
) |
|
(26,053 |
) |
Payments for business combinations, net of cash acquired |
|
|
— |
|
|
(38,228 |
) |
Purchases of intangible assets |
|
|
— |
|
|
(11,528 |
) |
Purchases of other investments |
|
|
— |
|
|
(5,000 |
) |
Net cash provided by/(used in)
investing activities |
|
|
51,886 |
|
|
(247,052 |
) |
|
|
|
|
Financing
activities: |
|
|
|
Proceeds from issuance of common stock |
|
|
21,394 |
|
|
35,062 |
|
Repurchase of common stock |
|
|
(99,276 |
) |
|
(120,486 |
) |
Payment of cash dividend |
|
|
(51,741 |
) |
|
(50,681 |
) |
Distribution to noncontrolling interest |
|
|
(266 |
) |
|
(1,435 |
) |
Shares repurchased for tax withholdings on vesting of restricted
stock |
|
|
(26,800 |
) |
|
(32,720 |
) |
Payment of deferred consideration for prior business
combinations |
|
|
(500 |
) |
|
— |
|
Net cash used in financing
activities |
|
|
(157,189 |
) |
|
(170,260 |
) |
|
|
|
|
Effect of foreign exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
9,415 |
|
|
(1,541 |
) |
Net increase/(decrease) in cash,
cash equivalents, and restricted cash |
|
|
65,049 |
|
|
(324,194 |
) |
Cash, cash equivalents, and
restricted cash at beginning of period |
|
|
628,371 |
|
|
1,233,032 |
|
Cash, cash equivalents, and
restricted cash at end of period |
|
$ |
693,420 |
|
$ |
908,838 |
|
GAAP to Non-GAAP Reconciliations |
(in millions, except per share data; unaudited) |
|
|
|
|
|
|
|
The following
tables present Dolby's GAAP financial measures reconciled to the
non-GAAP financial measures included in this release for the second
quarter and year-to-date periods ended March 31, 2023 and
April 1, 2022: |
|
|
|
|
|
|
|
Net
income: |
|
Fiscal Quarter Ended |
|
Fiscal Year-To-Date Ended |
|
|
March 31,2023 |
April 1,2022 |
|
March 31,2023 |
April 1,2022 |
GAAP net
income |
|
$ |
95.7 |
|
$ |
36.7 |
|
|
$ |
175.1 |
|
$ |
116.7 |
|
Stock-based compensation (1) |
|
|
29.8 |
|
|
27.7 |
|
|
|
61.1 |
|
|
60.4 |
|
Amortization of acquisition-related intangibles (2) |
|
|
2.4 |
|
|
2.7 |
|
|
|
3.7 |
|
|
5.5 |
|
Other operating income adjustments |
|
|
— |
|
|
34.4 |
|
|
|
— |
|
|
34.4 |
|
Restructuring charges/(credits) |
|
|
— |
|
|
5.2 |
|
|
|
(0.2 |
) |
|
5.1 |
|
Income tax adjustments |
|
|
(5.3 |
) |
|
(12.7 |
) |
|
|
(9.7 |
) |
|
(23.6 |
) |
Non-GAAP net income |
|
$ |
122.6 |
|
$ |
94.0 |
|
|
$ |
230.0 |
|
$ |
198.5 |
|
|
|
|
|
|
|
|
(1) Stock-based compensation
included in above line items: |
|
|
|
|
|
|
Cost of products and services |
|
$ |
0.4 |
|
$ |
0.3 |
|
|
$ |
0.9 |
|
$ |
0.9 |
|
Research and development |
|
|
9.5 |
|
|
9.2 |
|
|
|
20.2 |
|
|
19.3 |
|
Sales and marketing |
|
|
10.3 |
|
|
9.8 |
|
|
|
21.0 |
|
|
22.1 |
|
General and administrative |
|
|
9.6 |
|
|
8.4 |
|
|
|
19.0 |
|
|
18.1 |
|
|
|
|
|
|
|
|
(2) Amortization of
acquisition-related intangibles included in above line items: |
|
|
|
|
|
|
Cost of licensing |
|
$ |
— |
|
$ |
0.6 |
|
|
$ |
0.1 |
|
$ |
1.3 |
|
Cost of products and services |
|
|
1.0 |
|
|
0.6 |
|
|
|
1.8 |
|
|
1.5 |
|
Research and development |
|
|
0.1 |
|
|
0.1 |
|
|
|
0.2 |
|
|
0.2 |
|
Sales and marketing |
|
|
0.8 |
|
|
1.1 |
|
|
|
1.6 |
|
|
2.2 |
|
General and administrative |
|
|
0.5 |
|
|
0.3 |
|
|
|
— |
|
|
0.3 |
|
|
|
|
|
|
|
|
Diluted earnings per
share: |
|
Fiscal Quarter Ended |
|
Fiscal Year-To-Date Ended |
|
|
March 31,2023 |
April 1,2022 |
|
March 31,2023 |
April 1,2022 |
GAAP diluted earnings per share |
|
$ |
0.98 |
|
$ |
0.36 |
|
|
$ |
1.80 |
|
$ |
1.13 |
|
Stock-based compensation |
|
|
0.31 |
|
|
0.27 |
|
|
|
0.63 |
|
|
0.58 |
|
Amortization of acquisition-related intangibles |
|
|
0.02 |
|
|
0.03 |
|
|
|
0.03 |
|
|
0.06 |
|
Other operating income adjustments |
|
|
— |
|
|
0.33 |
|
|
|
— |
|
|
0.33 |
|
Restructuring charges |
|
|
— |
|
|
0.05 |
|
|
|
— |
|
|
0.04 |
|
Income tax adjustments |
|
|
(0.05 |
) |
|
(0.12 |
) |
|
|
(0.10 |
) |
|
(0.22 |
) |
Non-GAAP diluted earnings per share |
|
$ |
1.26 |
|
$ |
0.92 |
|
|
$ |
2.36 |
|
$ |
1.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - diluted |
|
|
97 |
|
|
103 |
|
|
|
97 |
|
|
103 |
|
|
|
|
|
|
|
|
The following
tables present a reconciliation between GAAP and non-GAAP versions
of the estimated financial amounts for the third quarter of fiscal
2023 and full year fiscal 2023 included in this release: |
|
|
|
|
|
|
|
Gross
margin: |
|
|
Q3 2023 |
|
|
Fiscal 2023 |
GAAP gross margin |
|
|
86.0% +/- |
|
|
87.5% +/- |
Stock-based compensation |
|
|
|
0.2 |
% |
|
|
|
0.2 |
% |
Amortization of acquisition-related intangibles |
|
|
|
0.3 |
% |
|
|
|
0.3 |
% |
Non-GAAP gross margin |
|
|
86.5% +/- |
|
|
88.0% +/- |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
Q3 2023 |
|
Fiscal 2023 |
GAAP operating expenses (low - high end of range) |
|
|
$227 - $237 |
|
(2%) +/-
year-over-year |
Stock-based compensation |
|
|
|
(31 |
) |
|
|
(124 |
) |
Amortization of acquisition-related intangibles |
|
|
|
(1 |
) |
|
|
(4 |
) |
Non-GAAP operating expenses (low - high end of range) |
|
|
$195 - $205 |
|
+2% +/- year-over-year |
|
|
|
|
|
|
|
Operating
margin: |
|
|
|
|
Fiscal 2023 |
GAAP operating margin |
|
|
|
|
|
19% +/- |
Stock-based compensation |
|
|
|
|
|
|
10 |
% |
Amortization of acquisition-related intangibles |
|
|
|
|
|
|
1 |
% |
Non-GAAP operating margin |
|
|
|
|
|
30% +/- |
|
|
|
|
|
|
|
Effective tax
rate: |
|
|
|
|
|
Q3 2023 |
GAAP effective tax rate (low -
high end of range) |
|
|
|
|
|
22% - 24% |
Stock-based compensation (low
- high end of range) |
|
|
|
|
|
(2%) - (1%) |
Amortization of
acquisition-related intangibles (low - high end of range) |
|
|
|
|
|
(1%) - 0% |
Other (low - high end of
range) |
|
|
|
|
|
(1%) - 0% |
Non-GAAP effective tax rate
(low - high end of range) |
|
|
|
|
|
19% - 21% |
|
|
|
|
|
|
|
Diluted earnings per
share: |
|
Q3 2023 |
|
Fiscal 2023 |
|
|
Low |
High |
|
Low |
High |
GAAP diluted earnings per share |
|
$ |
0.18 |
|
$ |
0.33 |
|
|
$ |
2.01 |
|
$ |
2.51 |
|
Stock-based compensation |
|
|
0.32 |
|
|
0.32 |
|
|
|
1.29 |
|
|
1.29 |
|
Amortization of acquisition-related intangibles |
|
|
0.02 |
|
|
0.02 |
|
|
|
0.08 |
|
|
0.08 |
|
Income tax adjustments |
|
|
(0.05 |
) |
|
(0.05 |
) |
|
|
(0.23 |
) |
|
(0.23 |
) |
Non-GAAP diluted earnings per share |
|
$ |
0.47 |
|
$ |
0.62 |
|
|
$ |
3.15 |
|
$ |
3.65 |
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - diluted |
|
|
97 |
|
|
97 |
|
|
|
98 |
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:Maggie O’DonnellDolby
Laboratories914-267-7390investor@dolby.com
Media Contact:Karen HartquistDolby
Laboratories, Inc.415-505-8357karen.hartquist@dolby.com
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