DLB - Earnings call transcript Q2 2021 | Dolby Laboratories, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing fiscal second quarter results. [Operator Instructions] As a reminder, this call is being recorded, Tuesday, May 4, 2021. I would now like to turn the conference over to Jason Dea, Senior Director of Finance and Investor Relations for Dolby Laboratories. Please go ahead, Jason.

Jason Dea

afternoon. Good Laboratories Earnings Dolby Call. Quarter Second to Conference XXXX Welcome

Laboratories Kevin CEO. President Joining Officer. are Dolby and President Financial Vice me today Executive Yeaman, and Chew, And Chief Lewis

assumes our will outlook. XXXX our to assumptions recent can found These forward-looking in discussion risks half we as outlook. captioned And today's that as are a of future quarterly reminder, uncertainties and and any second and risks a statements, release the XX-Q. As obligation including statements statements third press update to forward-looking underlying the the and that Risk or quarter fiscal that include on subject uncertainties our does particular, additional materially business result call the time. statements these intend results Form actual made statements the today cause of section under this this be from most COVID-XX events. uncertain to forward-looking impact remains differ in Dolby on of no at new Discussion extent Factors and information well today. earnings section may as the during issued continued not report our In of made of

of we X website. release Dolby measures. non-GAAP GAAP discuss reconciliation between our Relations data earnings A Investor Laboratories Investor the call, and section and the today's is During Relations our will in the available financial press in on sheet

discussion of third of fiscal and the for outlook. business, Dolby's Kevin our and content will As the results second quarter provide of a today's will half with a financial follow start XXXX Kevin and with recap call,

to call now will I Kevin. us, the behind introduction that with over So turn

Kevin Yeaman

quarter, revenues solid to our a year. start are With Thank another you, everyone. off good Jason, strong we performance fiscal to in-licensing and this afternoon,

have XXXX, earnings Our fiscal first higher of XXXX grown half to revenues fiscal the rate. have at and even grown about an first compared XX% half

are of the Dolby's their seeking and and services the reflect the consumers across Technologies business that devices adoption content. of Our Dolby financial model to results strength broad enjoy

deeper Before creating is of and our will be bringing to we to The how address include proposition of Atmos you With through numbers, music will experience I Atmos. enabling use is music value becoming significant for Atmos of Dolby the With new announced of devices how a use to areas for highlight new cases songs, adoption existing our of a we and significant of and growth. device add wanted categories, content. for progress people for music, in their recent enjoy range device adoption is number the Lewis in experiences, growing together a favorite examples to can experiences which the content of broader forward are we in for Dolby Dolby takes our the a some example of how categories, step growing enabling Dolby opportunities example services. the drive to for which opportunities Atmos. to motors and more of market a first that the for they Lucid adoption ways Air Lucid X Dolby enable broader case are Lucid automobile the creating range the that library just we will automotive. consumers a expand entertainment of the first the address opportunity within is primary car enjoy and Dolby to Atmos Dolby

being the Gaga many Lady Swift, We artists like as recent and made Including top in nominated world more around Megan Thee grammy artists have Atmos. songs engagement are Dolby strong Stallion. available with and albums Taylor

Atmos. began India music music supporting This Title, quarter, and music Hungama Hungama, in streaming Dolby service Dolby and joined Amazon streaming a who are They top currently Atmos.

automotive see Dolby and of the Atmos PCs, Xbox across to and much headphones. Dolby Dolby we Gaming opportunities the console X be launched adoption Olufsen Xbox deepen Dolby phone for will music, with number to from will Dolby services build this to more on Atmos, ways to new that support our continue Dolby to As content, more is Lenovo experiences. support Atmos. games. for for and we support mobile, experience we momentum of growing Atmos the opportunity & another for us, a highlight of to headsets Vision Microsoft quarter designed to gaming for gaming the new bring gamers to ahead gaming see Dolby combined Atmos. where area and Legion the enjoy for Dolby recently have phone to mobile first released a experience the support Bang highlights Duel Microsoft that adopt

Dolby eSports event the saw and quarter. We in Vision this Dolby first Atmos also

through of they event gives an Atmos As by engage Esports matches in showcased combined overwatch be enabled Dolby part PCs Blizzard us experience the and that are Vision Dolby to consoles. opportunities gamers Dolby Entertainment's that experiences unique to BlizzConline, gaming about. bringing to and the viewed we passionate

existing value cases device. the Dolby more on proposition addressed adoption At enable mobile mobile for devices. highest As Dolby presence PCs more the more add to we same of drive time, we music we mobile for of use number on ways experiences quality the games, grow primary on expanding a gaming enjoyed gaming, the and see our and the content X across we experiences of and phones. to By reasons our within consoles, in

new Dolby iPhone record experiences few mobile to content are app. in able Atmos enabling how a like being Vision live sports Dolby or in enjoy the XX to past in able being with mobile, quarters, Over through we we've highlighted the

will Dolby quarter, in leading of languages. podcasts This podcast genres and available Atmos. content making the in different India across a multiple first to app service earshot, Atmos podcast They Dolby became support be

the driving to address a adoption content, across more for Dolby range relevance the continue our mobile Dolby expand broader Atmos Vision of with we cases we the of deeper and for As used reasons of partners. devices,

experience by the iPhone combined support lineup vision mobile, launched and to Dolby Apple partners support Dolby Atmos within that the Vision experience. is This of Xiaomi and mobile features the Atmos. highlighted quarter, Dolby phones This first number XX that their Dolby Dolby adds which growing that the

In models. continue flagship with of Atmos addition, their to Sony latest and Samsung, highlight the Oppo launch Dolby recent

strong progress position this which within drive within of more our to device adds and TV adoption continues All room. content, the living movie to

released Xiaomi, This world, QX quarter, partners around Skyworth, sound the released new experience. for and including our Atmos. Highlighting that bar. the TVs, Dolby support their Within Samsung combined models support

for Dolby this In ahead levels significant Atmos, Dolby supporting reach TV Dolby With broad being flow audio by of core experience. similar a on room, the TCL the support of technologies. we Vision our Dolby to is highlighted recent driven consistent Atmos see with new devices Hisense titles addition to in and enabled opportunity living and presence also that the higher Dolby to within launches. Vision of a in still their Atmos adoption IQ momentum, and Vision Dolby adoption The Dolby of combined are

continue broad Our their experience HBO the range in available of make release consistently streaming latest partners, is combined a titles. TV+ like titles Dolby, highlighted Netflix, Max, to and of Disney+, Apple and the with

Let me cinema. to shift

return about certain Cinemas As movies, is capacity the Experiences the out restrictions. consumers have to a our they opened to We of premium seeking are best now globally Dolby and movie. enjoy XX% to to begin way Dolby Cinema

we and also Our recently engagement opened with China, a X we added had Dolby Cinema partner quarter. remain new as locations during in partners strong new Dolby Cinema exhibitor the

detective Kong strong in like Godzilla 'Hi available Mom' year, X including all in office were and Dolby successful titles will Black signs available performance of We also box content Cinema. local China, initial We that Cinema. versus and Gun: Chinatown this Quiet Widow to Place in ahead titles that see and anticipated be Maverick, all Dolby look later including A Top from II

year, Dolby.io, last we to our interactions bring the broader development the Magic TV best that much of content range Dolby music movie, platform. experiences with the started During powers to have and and a

APIs. with their Our on platform community, engagement on growing of the focus the with number is deepening engagement building our the and developer developers our

and that by week, now their we easily audio of use last completed can within Dolby.io. Box.com an from powered users are APIs. Companies stored directly quality box, box Media improve files where to their with integration the Dolby their enable Just

broad customers range the of unique We are to opportunity and to to to engage Dolby.io. excited more drive bring solutions people with Box's

Our to that from customers multiple interactivity or supporting cases, connect with case, fans, range APIs and across are teams. we for streaming learning to X enables used industries live an application a influencers wide in of supporting enabling online even see new medical

with opportunities are With where media interactions together As real-time higher we we cases used opportunities Dolby.io, to we and our come solutions our see also comprehensive by number see where support best experiences learning new from and developers embedding quality recorded media and media interactions. of and bring to offerings we can significant both our engagement being evolving real-time we best-in-class the enabled by look a growing ahead, with uniquely provide interactivity APIs.

content momentum more we of gaming. up, enabling experiences music Dolby Atmos wrap to So Vision have like growing Dolby in and in and forms

we of devices services. strong our As to we much adoption content address technologies content, movies more and and With build range across world enable a a upon interactions. larger to our our position of for Dolby.io, address experiences and are and beginning reasons create TV technologies within broader

All I'm over our ability hand of growth this with drive going financials. to into gives us to through confidence the revenue in to future. us to it that, take Lewis And the and earnings

Lewis Chew

Thank the And course, Okay. you. you, may afternoon, with everybody. be force Good Kevin. of

we and earnings previously very quarter. higher said, results Revenue Kevin financial in our were As solid this than coming guided. both

everyone. go me let So a for details few through

of million above was several million million we PC last about of a then basis, down when and were quarter. million that On Dolby to $XXX QX and lower also as cinema-related we quarter above the of our anticipated in seasonality, due guidance from offset markets. shipments and higher beginning the end from partially higher-than-expected was year's of benefited revenue revenue $XXX market of $XX year-over-year recoveries both And true-up reported $XXX Technologies had the lower we the volume for and from revenue to in sequential a TV. our due quarter areas quarter revenue to our $XXX of second basis, our that volumes in and down estimate. lower business adoption were QX Second like range million, of total gave recoveries at guidance by were a from higher lower these was On

in-licensing products and services. QX of comprised million million in $XX $XXX the So and was revenue

seasonality in basis, decreased certain Broadcast of of licensing of of that and driven technologies. timing go was of partially about market from by mobile was the because Consumer offset about certain XX% due consumer timing last Mobile by due higher On lower year, PC QX. On up disc to licensing Dolby of by disc licensing contracts, PC in patent devices of as lower timing in-licensing was a a higher broadcast recoveries like seasonality and year-over-year Sequentially, let's by represented that was lower by bars lower ASP by On represented were from higher Dolby. in of cinema of On and recoveries. by QX. PC Vision higher Mobile the sequential along seasonally primarily programs. offset that than in about to offset by partially sequential lower represented by a shift our about CE XX%, partially sequential end markets other about contracts. approximately the last market, revenue adoption due was total driven lower X% about automotive, represented about declining Atmos. that second and revenue with XX%, represented higher Dolby adoption XX% and adoption decreased under admin seasonality increased due revenue by On by revenues. year-over-year, in second about was about broadcast. timing timing recoveries Broadcast gaming and from. trends higher basis, XX% markets by Dolby down total contracts. They total XX% and from up by and Atmos. Other higher of X% market year-over-year, higher with our contracts, quarter. of with volume, XX% adoption along of DMAs of XX%, total in activity was shift by well XX% lower about lower XX% in offset by partially by in lower decreased about the along second a in with that partially to gaming to higher starting under of versus mix decreased as due by basis, XX% a to XX% basis, about volume And contracts and under driven revenues was revenue a of by offset So decreased electronics licensing and volume licensing due year total XX%, about about non Vision along a through Dolby quarter. primarily basis, of fees electronics was with Dolby to quarter. revenue units. sequential driven mainly sound

our last year's because was the in attributable million revenue the licensing, year-over-year services to in demand QX. $XX and industry was and of QX $XX.X to Beyond the lower million in cinema decrease QX million $XX pandemic. products compared in and And

million like So in gross $X.X compared the basis. gross million the on first operating to and in a QX a compared GAAP now XX.X% basis margin, services in margin a on GAAP gross in second Products QX $X.X services, expenses. was and million in $XXX,XXX and Products minus was discuss $X.X basis a gross quarter. minus and to to quarter and products QX on non-GAAP negative basis the services a first margins quarter. positive a I'd margin was XX.X% Total on non-GAAP margin

we from or line on gave. also, As or quarter. basis first I in manufacturing, in reduce benefited million, were non-GAAP guidance, in of on of in Non-GAAP compared non-GAAP XX.X% revenue gross our took facility to gain XX.X% The on year. in revenue, in million last Income mentioned second into second cost we $XXX.X income or Net $XXX.X effect million and basis margins operating was to revenue a $XXX to the QX $XXX.X income tax QX on in GAAP sale territory. a million structure And million in increases a compared the I GAAP income on XX% year. of XX.X% the non-GAAP with in the basis product revenue a that expenses the guidance that's was QX. last quarter pretty million GAAP expenses a positive or of second on XX.X% and the when basis of the basis. in in basis Brisbane. QX gave XX% Operating on of were diluted beginning helping year's on to employee second on million quarter our basis in $XXX.X $X.XX went $XXX.X per compared And share, compared Operating or or much second non-GAAP per a net $XX.X in QX. basis was $X.XX $XX.X diluted in Operating return expenses $XX.X compares to a that income million million and million quarter Operating steps share that a the to for last diluted operating $X.XX million compares the the last was million or or annual at quarter a expenses in of in year. second quarter quarter were was our $XX.X share per to of QX of $XXX.X GAAP base diluted salary per $XXX $X.XX share, to QX. QX

expected. and For we now had quarter we the GAAP in what coming income in second gave both higher non-GAAP that guidance the was net to was revenue the due than above

second and cash generated cash year's about operations we million in in year the last this we generated the quarter quarter, second from second to and compares the with which million quarter, $XX During billion $X.X about in ended investments. $XX

quarter, second about we ended the stock bought our shares During the repurchase of with authorization stock available. about back common $XX still XXX,XXX million quarter of and

of shareholders dividend XXXX. XXXX, also The on We payable per cash a share. of record dividend to be will May XX, May announced XX, $X.XX today on

X XXXs. in see for ago, assumptions, outlook based we now mid- to I of So talk second factors about variety a outlook. went that then the through half months let's a the high forward QX, said for scenario the on could revenues I when and

$XXX we quarter million QX range to could second to half million. products licensing range $XXX $XX revenue I to $XXX and updated focus from could that, while revenue services $XXX $XXX million for with $XXX if ranging to third revenue on from And that scenario is million. $XX Within specifically million could range million, from from more us, anticipate million. QX, million our behind Now total

made PC indicate TAMs the industry of a be terms market we've on second basis. about higher analyst assumptions reports half conditions, In that year-over-year the could in

the higher compared devices, cinema our in revenue growth indicate second the expecting second of in industry adoption organic where and the to on year-over-year we the half, repeat a might TAMs second At and by consumer anticipate of could businesses various it related this an are TVs that's because the Technologies we that also reports last basis. our continue broader industry demand was Dolby year Driven And for last starts middle across the recover same of year. half down be uptick half to in markets. in other as that from not broadly but pandemic, to in However, happened year. time, that

rest So gross to is estimated outlook expenses GAAP and million million, to $X move range from that, range to $X let and XX% me million estimated from breakeven our to of a XX%. margin products to basis services GAAP for from margin the Operating on million in on million basis. from range basis a $XXX QX. margin to to estimated range positive from $XXX million non-GAAP expenses $XXX gross QX is basis estimated and XX% to estimated range Within P&L non-GAAP QX $XXX on on basis the QX XX%, operating about are on to to non-GAAP gross is $X in on a million. a and a the to positive from GAAP

whole, as point, the operating that as taking standpoint, timed mainly much that But as of second be expenses QX. OpEx QX the what to from on update marketing by means results. half year, expenses our point to activities expenses when differently. we timing what at year, out more range QX give end at from QX just of you this QX Now this would their which driven high marketing this in being like report to we that were for increase the I'd a be have similar place spend programs least in is the at our a the could they last in year an We'll our also

So is rate million to from that's third the to tax effective XX% $X $X Based third the let's quarter, for a diluted to to estimate quarter. basis. million just and to QX QX $X.XX finish projected $X million per range income both for on basis factors projected range a on non-GAAP the is on that up our million could covered, QX outlook. $X from on And for combination earnings Other from range share the to non-GAAP and XX% $X.XX I to GAAP of GAAP we a $X.XX a $X.XX basis. and from

that, over it with So I'll back Yeaman. kick Mr. to

Kevin Yeaman

you Thank other All I news remarks would you Lewis. I until day. through acknowledge for to got the your right. you, our promised wait

Lewis Chew

Thank you that. for doing

Kevin Yeaman

Yes.

that today I'm As all also of Lewis impact you made a we you to of sure announced has this to decision Lewis year. I And had. that most retire saw, later the want or has acknowledge

is working the very with next And a a identify ensure our countless last role the done supporting Lewis integral he's team. transition finance business employees, position, smooth has closely models, He's played just both be mentored strong within can't Lewis thank for work and X to to everything for building of built overall Lewis strong Dolby. we and as He's beyond years, in me expansion an our Over financial CFO. new going navigating enough Experiences. the Dolby to I organization.

We're Lewis all time will of course, focus to still best. you enjoy now. his for going we more to Lewis, family. that got And happy So wish to on a be And lot the then Lewis. we'll has that we've

Lewis Chew

riddance? when I So said that Kevin, first it you you, true told good is

Kevin Yeaman

you might think have misinterpreted that. I

Lewis Chew

the experience called now that you. investors privilege a thank Jokes but memories. And they I of definitely all had I've there yourself serve as the because my Thank putting whistle here. great and Well. all actually you all say for definitely about it out that Yes, moment, unique Dolby to believe for but have been of most I has up a fit can think category, own I with humor. bad it's my Board, to can't books the and since company's my jokes CFO probably that we're lot Dad experience,

the move Great Company So forward I a to is ahead. great on promise smooth phase. to as transition in shape, we next great shape. look

watch happily will from I So sidelines.

Kevin Yeaman

that, about are a anyone All Well, right. with of most lot heard get audience to disagree our the And time. get of covered your you out when quality We've make eager is we questions. your to ground. the of remaining sure with sure I I'm Lewis, haven't talk humor. to going transition yet and you And

to it Q&A. And so turn let's over

Operator

Instructions] of first line question from Your [Operator Schackart Ralph William the Blair. comes with

Ralph Schackart

A if couple I could.

question any had work investors? I kind Dolby. the know you it? sense just this maybe for that now you've then first on too, of work the Kevin, Just obviously, often, but you website. quarter And in on just opportunity with to price, also pricing of terms get framing the Just another of with some have

just Just that receptivity the it's kind cases customers some are what And if has what use hurdles and and gaming the maybe been curious pricing guess, from, of going of or I efficiently? on of priced forward? sort effectively sort of plan,

Kevin Yeaman

on, opportunity, doing significant the like day media of cloud. And bring we things consumed created that as a help that really, to Well, we just addressing Ralph. being for every focus as in the people content lot for and bear lot the think feel in out can there's a amount the to of that. as continue content, of is excited. we to well high expertise great terms to our create we of Thanks great quality look, content opportunity do in and demand the real-time a increasing relates the opportunity we're and way, it interactivity think We Sure, and quality be a that to in question. is

large enable or partnership is should the partner announcement about This to it's their I our content. lot have And Dolby with with and a their in media improve space. store integration said interest excited them. they Box media are say, their Box, a We presence in customers easily of a to their that with has we've going right to where entertainment. enable Box content users very entertainment seen the able to

allow So them improve content. going much broad range a easily this to and audio more to with is their of

more our the excited we're would goes. APIs. point continuing yes, board, the that as about on so to far things we're focused developers And developers that. as up, So far, pricing, And signing And are on well more say out, you with across the engaged website. yes, I get going as is

Ralph Schackart

terms are And of just Great. about then talking cities and in eased. states reopening and capacity constraints

what for exhibitors you're fiscal on balance the cinema in side cinema curious Just contemplated what's and seeing hearing or guide 'XX? the of from the for

Kevin Yeaman

Yes.

Ralph, So in city I'll still still might specifically -- chime general, continued start with by city, by I -- know point you we've in U.S. But the to in the But Lewis, it's high you I as the don't mean, is more out, country level. on here guidance. if up of signs seen want country. opening it certainly

In What get the direction. what them open. is my remarks. right they've the that experiences. more successful been to I very the mentioned in would also -- has have Asia, seen right Europe that few skewed beginning premium there is they're been heavily back prepared we've a box is of think releases. I have But office in say I toward -- some more there

when that believe do continue the going want possible And way. so to in we to go to to the they're back best movies, experience people

is focused. course, where, action And always and the that's where where to is be. we're experience of premium the going think -- we that's So

now, -- of We obviously, somewhat expect, see we the course, throughout things all appropriate rest do the year, continuing do see So to right although, way uncertainty. with there's is qualifications improve the we to of it pace -- the uncertain. this see we yes, around things

Ralph Schackart

to last, want you've enjoy just retirement? reserved on won't Lewis, Lucid call a This wish to just it. the certainly you congratulations on be hopefully, And And without Great. retirement. same

Lewis Chew

Yes.

smoke thing, I because demos demo the it's you demo, wish I've but have short the And in who to that heard what. reason almost the see is see phenomenal. heard, car the nothing from know could I've see why Ralph, ironic who people believe With of my, for demo, the pandemic experienced I blow really the there's it, them here I shall no the up

be it nice cool these of think will anyway. evolve forward I yes, things going So see to some

Operator

comes Frankel next from the with Your line of Colliers. Steven question

Steven Frankel

half, those I shifts a in in are between there material the front in know of back had any and versus year? QX QX Lewis, the half? changes we couple timing last

Lewis Chew

think Yes. year, I a calm. is little back more half the This bit

say, a would answer, as I level So high no.

I had of complexity -- first the think this more we more of of half that in year. that

have much I guidance given that fairly think QX, in you for we've a you now revenue for QX, that we framework tight and given this I've don't as quarters between X year. of noise the

Steven Frankel

integrated the I get to easy use the come once up box Okay. separately can up, Dolby so looking I'm this for to product? to a have Is sign box Or a on in sign and do little and And Kevin, more you relationship. are check I detail like directly Box? box or of that and it's within I just kind

Kevin Yeaman

Yes. Steve. Thanks,

up sign with Box. You

of it the access And -- will work enhanced Dolby's if directly as And Box has so a the APIs. is the Box point, their Box selecting much happens enable that point, X running and the what with the So users, at or comes can to as users enhancement button Dolby they pressing at enterprise. payments to with file and simple content. through back any administrator IT their audio as it's the included And up that pretty Dolby partner integrations. sign with audio us

Steven Frankel

channel have IL. the What developers is pretty with so far effective recruiting good. found most That's Okay. you for

Kevin Yeaman

Dolby.io, we word-of-mouth of looking but been the whether I for and then we university of Obviously, by spread in number our attention, launched have Well, or Southwest that of getting I some events, been since amongst we that's of and more think the developers. an which, explore. south increasing people mode, we've have that virtual for first -- course, wins events, in And look this what all, can for people engaged into amount learn by brings Hackathons drawn to to which I we're coming would going -- the it's say -- as been will other we've participating -- to get And to is about -- those confident we minutes an connect improve more there on on is be forward, authentically to that can think that interactivity. nobody do what for increased -- and of I around we number things Because the Dolby content, people are based massive them. there else. developers there of of said opportunities with like great ways I the are as think a of increasing find quality earlier,

Steven Frankel

any progress Great. with broadcast And on being then on vision. live update vision, content and

Kevin Yeaman

the I'm X the because I the don't -- people around opportunities more to beginning, engaged kind on people. kind we live larger the a of of and that especially of of know Atmos get it But is protocol pandemic just which requires events get dynamics often that many now current come so pausing, out you that, starting date, number across the largely side I'm we're specific of as that been the broadcast. ructions but kind to that it's be To scale. continue number I'm more event wanted of other being is the first Steve, to a minimize that few tires vision thing was events, some new and for both everybody and of of in in lifted, to

beginning Atmos, So that see of we've vision of public pick and and/or of event streaming and to definitely continued number we private to activity up have and again. some kind a

Steven Frankel

enjoy you, retirement. comment. echo Lewis and your I'll Thank Ralph's

Lewis Chew

Steve. you. working you. with Great Thank

Operator

the Paul from Chung comes question line next with of Your JPMorgan.

Paul Chung

Box. on just So follow-up another

or Dolby rates the So opportunity file were video What XXX% then how size their size of that XX%. seeing the for uploads vision and taking API? just media usage on And of we assume well? we do audio there? the that? of up as and if kind base here, growth big How that mentioned and the what how kind is processing about to Any side vision there potential you're

Kevin Yeaman

first how with out mean with to some -- in the days. about I part world. again, entertainment. just give presence in are box of because it hypothetical it of we've, So to our someone of excited and the you because of But as question, that relates To a we're look, space. to might opportunity we've your substantial APIs of We're the very examples and lot interest had box media employ there that here it's work media early want in gate the integration.

company of you high quality. imagine, around of could with be the level all varied be to of podcasters through our world production that a to It content. interviews, could doing are But And because people outside voiceovers that endless using get degrees APIs the newscasters clean imply could lot examples to a doing we're they're has out employ As of can quality. That run you right phone can or it gate. a different Dolby up. their

customers we your to FOX we're their And I that me do, can can partnering begin so remind think with -- going usage. getting part and to enabling I'm of show you So what they question? be the closely that can second sorry,

Paul Chung

Video.

Kevin Yeaman

Yes. Vision.

So yes, now, interactivity audio the is, course, right of video.

we that across that can can we you to on media our platform. as enhancement are to and expertise our opportunities audio map, APIs look vision be that our Our at sure road see bring you of imaging portfolio APIs, focused

Paul Chung

use even makes or a Okay. business? the and not well for this you that, Or Is live. there? great time apps gaming audio case that case live use or Can sense. Any Great. there even other spent And with cases? streaming fit would share use video

Kevin Yeaman

share examples. sense, and customer had creative fans. last week And creators I recently, from to with to advantage revenue media their relates a as directly Dolby.io of yes say, potential going to have broad an advertising. to the interact announcement you is the it or enable taken was I'm community rather those it they had yes, In give their company, always which announcement. We social To a couple in applications. an Display to allows think of

So concerts also that's also kind all a kind with the and which live of example social with a forms artists of at We're of of virtual done. of special virtual We're events. very working what company can be name fans by experiences. Home, connects also for looking live

some people the more real-time to doing. high-quality greater across of it's media of the are content So interactivity have examples and of where those what again, are and But their the quality looking we're board. improve

Paul Chung

jokes, then free and will give miss for a And dad question. but you the question I last flow I'll you. cash Lewis, Got

half the how half. over half? of the first how So of kind second about be think to to performance do first we second the guide Or given of Kind seasonality past seen half years. you've to the higher revenue years? of the a lower similar couple pretty kind of is in slightly we versus expect you in previous strong had relative first kind than Should half

Lewis Chew

core now I are give didn't I since and your on that the factor in more rearview our collection -- mirror, can flow as projection and because the our sense things a lapped Probably say spot now year cash opposed that is the our cash highly biggest the to for flows earnings. you business. left see in Yes. would question much receivables to swing is correlated probably we've that that first that XXX like

earnings flow amount firmly forward, into Paul extra without all normalized on all quarter the of cash the of believe So XXX, estimated of and because I'd revenue on taking as quarter say see well necessarily I that any balance grow, now that. on as X and equivalent going translated are there whole because our sheet you'll we revenue that

quarters operations starting where see pattern So income. linked our the from highly cash you're in that's is to the these why to net flow

Operator

question with Your Jim next line from of comes Goss the Research. Barrington

Jim Goss

a begins of Dolby's when contribute technology to it maybe introduction year several in lead traditionally to thought from terms meaningfully. a time

version of well. in question prior robust. the with as you do related be like in on Or than bit over think to about you current a about those And more terms. I a type years, to a framing How the better envision contributions that of that? match the like think have, even -- couple the pricing basis, are know it think more pricing music you in we've there past mind seen gets Is traditional other do it of terms a be a different up had you've pricing of royalties is of Io might I'd or usage with going you that when obviously of would of Atmos that. different type way the that creating in things might IO, little out the the opportunity.

Kevin Yeaman

Sure.

many To processed about looking as many and on think way to So your of do basis. question possible last earn to Jim. media possible a we we're quality first. take content minutes the as to as minutes the is what the because way revenue as power thanks, of interactivity improve of it permanent is Again, is as enhance

our apps ways, this really all belief is realms best the the from decades the can apply be we IP the have quality, entertainment, have this are the these to beyond we music that of of and movies -- long-held audio/video the -- that starts services that that So have, doing every experience and day. in and using we're that applied know-how the gaming, TV, all premium all and we

that's time. Atmos the first life what to So the up of our bringing yes, life see time cycle ecosystem Vision your for Dolby opportunity. first to point for we to times, the as like kind the on to And an or bringing

I first To kind might partner experienced initial cycle in of the length a the realm applying But it and faster build promise holds a other that time. that Dolby.io say with much content. subsequent times somewhat content new first the from device kind time experiment in You've of cycle, and world the the up be shorter cycles there. that words, to couple of than learn the takes. bring it of being would of us of partner, a of

they we So see developer our With to cases, goal to are new of can the capabilities world. have. our and serve responding us apply new and put some how like In more what we some cases, innovation in will already to that it platform. developers a learning enables on quickly to experience, it that how know-how, it, IP

Jim Goss

partners And Okay. X primary in in to or for and much partner give in as recently. the develop if the that of new Cinema. the process? focused been being In U.S., your tied in the in number a room way those outside you It's I pretty AMC partner It's if other you United markets one Cinema terms there's had here, markets that wondering update on is then and you're can Dolby States. to any grow of sort Dolby partner only AMC the wonder area. has of I on another U.S. could issues. well. other if the was

Kevin Yeaman

a come industry. Yes. pretty Clearly, difficult time we've this has been for a difficult the through --

notably than seeing but I partner of they're the the to there's we're still did best engaged much when new pandemic think remarks in our And same said, by to remained like with prepared X been tempered the we a consistent very But pre we have that more going people pandemic. we experiences my Obviously, So mentioned box first has and come people screens. possible at in implications foremost, office they've the focused that toward keeping on the pandemic, I that's up experience that the do that was back, when premium already China. thesis way. back, it come want with and our pretty about been in that skewing I partners. and add time, with added

Jim Goss

aside the -- but that's opportunity? at another pretty are from that China, could you this one And stage, but be in where Okay. much

Kevin Yeaman

this Yes, in quarter. that's we the had partner only

multiple have that up running. partners we have you China we in know, Although -- multiple and as are

Jim Goss

well. Okay. your And is. would you Lewis, I agree. also venture And whatever I next wish

Lewis Chew

Thanks, Jim. it. appreciate I

Operator

There Kevin over further are no this back would questions turn any the to time. I at like conference for closing remarks. Yeaman to

Kevin Yeaman

Great. everybody, you updated forward on look joining very you, appreciate much questions. keeping we progress. our of Well, us. thank for We And course, the to

Operator

This call. today's conference concludes

now You disconnect. may

Dolby Laboratories (DLB) 5 May 212021 Q2 Earnings call transcript