Dolby Laboratories, Inc. (NYSE:DLB) today announced the company’s financial results for the fourth quarter and full year of fiscal 2023.
“We finished our fiscal year on a solid note,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “We remain confident in our opportunity to drive long term growth in TVs, Mobile, and Automotive as Dolby enabled content continues to proliferate and attract more consumers.”
Fourth Quarter Fiscal 2023 Financial Highlights
- Total revenue was $290.6 million, compared to $278.2 million for the fourth quarter of fiscal 2022.
- GAAP net income was $9.2 million, or $0.09 per diluted share, compared to GAAP net income of $27.8 million, or $0.28 per diluted share, for the fourth quarter of fiscal 2022. On a non-GAAP basis, fourth quarter net income, which excludes a restructuring charge of approximately $30 million described in more detail below, was $63.9 million, or $0.65 per diluted share, compared to $52.8 million, or $0.54 per diluted share, for the fourth quarter of fiscal 2022.
- Cash flow from operations was $85.0 million, compared to $51.3 million for the fourth quarter of fiscal 2022.
- Dolby repurchased 0.3 million shares of its common stock and ended the quarter with approximately $212 million of stock repurchase authorization available going forward.
Full Year Fiscal 2023 Financial Highlights
- Total revenue was $1.30 billion, compared to $1.25 billion for the full year of fiscal 2022.
- GAAP net income was $200.7 million, or $2.05 per diluted share, compared to GAAP net income of $184.1 million, or $1.81 per diluted share, for the full year of fiscal 2022. On a non-GAAP basis, full year net income was $348.0 million, or $3.56 per diluted share, compared to $319.9 million, or $3.14 per diluted share, for the full year of fiscal 2022.
- Cash flows from operations were $367.1 million, compared to $318.6 million for the full year of fiscal 2022.
- We held cash, cash equivalents, and investments of $982.3 million as of September 29, 2023.
A complete listing of Dolby’s non-GAAP measures are described and reconciled to the corresponding GAAP measures at the end of this release.
Fourth Quarter Business Highlights
- Apple debuted its latest iPhones powered by Dolby Vision and Dolby Atmos, including the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max.
- Yangwang announced its first car, the Yangwang U8 model, supporting Dolby Atmos.
- Polytron, the largest TV OEM in Indonesia, launched TVs that support Dolby Vision and Dolby Atmos.
- Hoichoi, an Indian Over-The-Top platform, adopted Dolby Atmos and Dolby Vision.
- Honor, a Chinese smart phone manufacturer, recently launched smart phones that support Dolby Vision playback.
- TCL’s 2024 TV lineup will support Dolby Atmos FlexConnect, a new solution that enables consumers to place wireless speakers, paired with a TV, anywhere in a room and automatically get an immersive Dolby Atmos experience.
Dividend
Today, Dolby announced a cash dividend of $0.30 per share of Class A and Class B common stock, payable on December 5, 2023, to stockholders of record as of the close of business on November 28, 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, international conflicts, and consumer demand for electronic products. In addition, 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 elevated 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 Annual Report on Form 10-K for fiscal 2023, to be filed on or around the date hereof.
Dolby is providing the following estimates for its first quarter of fiscal 2024:
- Total revenue is estimated to range from $300 million to $330 million.
- Gross margins are anticipated to range from 89% to 90%.
- Operating expenses are anticipated to range from $220 million to $230 million on a GAAP basis and from $180 million to $190 million on a non-GAAP basis.
- Effective tax rate is anticipated to be approximately 23% on a GAAP basis and approximately 20% on a non-GAAP basis.
- Diluted earnings per share is anticipated to range from $0.44 to $0.59 on a GAAP basis and from $0.80 to $0.95 on a non-GAAP basis.
Dolby is providing the following estimates for the full year of fiscal 2024:
- Total revenue is expected to be approximately $1.30 billion.
- Gross margins are anticipated to be approximately 89%.
- Operating expenses are anticipated to range from $885 million to $895 million on a GAAP basis and from $740 million to $750 million on a non-GAAP basis.
- Dolby expects operating margins on a GAAP basis to be approximately 20% and on a non-GAAP basis to be approximately 32%.
- Diluted earnings per share is anticipated to range from $2.30 to $2.45 on a GAAP basis and from $3.60 to $3.75 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. 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.