Dolby Laboratories, Inc. (NYSE:DLB) today announced the company’s financial results for the first quarter of fiscal 2022. For the first quarter, Dolby reported total revenue of $351.6 million, compared to $389.9 million for the first quarter of fiscal 2021.
“We made great progress across each of our key initiatives this quarter,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “The inclusion of Dolby Atmos in Samsung’s latest TVs, Dell and ASUS supporting Dolby Vision and Dolby Atmos in their PCs, and positive momentum with Dolby.io are just a few examples of how Dolby is bringing spectacular experiences to even more people around the world.”
First quarter GAAP net income was $80.0 million, or $0.77 per diluted share, compared to GAAP net income of $135.2 million, or $1.30 per diluted share, for the first quarter of fiscal 2021. On a non-GAAP basis, first quarter net income was $104.5 million, or $1.01 per diluted share, compared to $153.3 million, or $1.48 per diluted share, for the first quarter of fiscal 2021. First quarter cash flows from operations was $31.7 million, compared to $82.2 million for the first quarter of fiscal 2021. 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
Samsung announced the adoption of Dolby Atmos in their TVs for the first time.
Dell and ASUS will now support the combined Dolby Vision and Dolby Atmos experience in their latest PC line-ups.
Electric car manufacturer NIO announced their new ET5 model will include Dolby Atmos.
Comcast will deliver NBC’s coverage of the 2022 Winter Olympics with Dolby Vision and Dolby Atmos to their X1 customers.
COVID-19
Dolby continues to monitor the COVID-19 pandemic and its impact on our company. The safety and well-being of our employees and supporting our communities continue to be priorities. Our revenue continues to be impacted across various markets within licensing and products and services. The implications of COVID-19 on our future results of operations remain uncertain.
Dolby’s financial results for the first quarter of fiscal 2022 rely on estimates of royalty-based revenue that take into consideration the macroeconomic effect of global events, including COVID-19, supply chain constraints, and consumer demand for electronic products. For more information, see the section captioned “Risk Factors” in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2022, filed on or around the date hereof.
Dividend
Today, Dolby announced a cash dividend of $0.25 per share of Class A and Class B common stock, payable on February 23, 2022, to stockholders of record as of the close of business on February 16, 2022.
Stock Repurchase Program
Today, Dolby also announced that its Board of Directors has approved increasing the size of its stock repurchase program by $250 million, bringing the amount available for future repurchases of its Class A Common Stock to approximately $506 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 – Second Quarter and Full Year of Fiscal 2022
The volume of shipments, aggregated across various end markets and devices, continues to be impacted and difficult to predict because of economic uncertainty due to COVID-19. The global cinema market has been adversely impacted by COVID-19, and it remains uncertain when and where cinemas will resume operating at full capacity.
Our actual results could differ materially from the estimates we are providing due in part to the challenging economic environment and uncertain effects of COVID-19. The estimates we are providing for future periods reflect certain assumptions about the potential impact of COVID-19, based upon a consideration of external and internal data and information. For more information, see “Forward-Looking Statements” in this press release for a description of certain risks that we face, and the section captioned “Risk Factors” in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2022, filed on or around the date hereof.
Second Quarter Fiscal 2022
Dolby is providing the following estimates for its second quarter of fiscal 2022:
Total revenue is estimated to range from $315 million to $345 million.
Gross margin percentages are anticipated to range from 88.5% to 89.5% on a GAAP basis and from 89.5% to 90.5% on a non-GAAP basis.
Operating expenses are anticipated to range from $224 million to $236 million on a GAAP basis and from $190 million to $200 million on a non-GAAP basis.
Effective tax rate is anticipated to range from 19% to 20% on a GAAP basis and 18% to 19% on a non-GAAP basis.
Diluted earnings per share is anticipated to range from $0.42 to $0.57 on a GAAP basis and from $0.72 to $0.87 on a non-GAAP basis.
Fiscal Year 2022
Dolby is also providing the following estimates for its fiscal year 2022:
Total revenue is estimated to range from $1.34 billion to $1.40 billion.
Operating expenses are anticipated to range from $877 million to $897 million on a GAAP basis and from $750 million to $770 million on a non-GAAP basis.
Operating margin percentages are anticipated to range from 24% to 26% on a GAAP basis and from 34% to 36% on a non-GAAP basis.
Diluted earnings per share is anticipated to range from $2.50 to $3.00 on a GAAP basis and from $3.52 to $4.02 on a non-GAAP basis.
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. We partner 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, Inc. in the United States and/or other countries. Other trademarks remain the property of their respective owners. DLB-F