Dolby Laboratories

Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Dolby Laboratories conference call discussing fiscal fourth quarter results. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question and answer session. To ask a question, please press star one on your telephone keypad. As a reminder, this call is being recorded Tuesday, November 19, 2024. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.

Good afternoon, and welcome to Dolby Laboratory's fourth quarter 2024 earnings conference call. Joining me today are Kevin Yehman, Dolby Laboratory CEO, and Robert Park, Dolby Laboratory CFO. As a reminder, today's discussion will include forward-looking statements, including our fiscal 2025 first quarter and full-year outlook. management's expectations for our future performance, and other statements regarding our plans, opportunities, and expectations. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including, among other things, changes in customer demand, changes in laws and regulations, and the impact of macroeconomic events on our business. A discussion of these and additional risks and uncertainties can be found in our earnings press release as well as in the risk factors section of our Forms 10-K and 10-Q. Dolby assumes no obligation to update any forward-looking statements. During today's call, we will discuss non-GAAP financial measures. These measures should be considered in addition to and not a substitute for GAAP 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'd like to turn the call over to Kevin.

Thank you, Peter, and thanks to everyone for joining the call today. I'll start with an overview of the quarter and the year, talk about some highlights in Q4, and then I'll cover what we're expecting in FY25 before turning the call over to Robert to review the financial details. Looking back on the quarter and the year, global consumer electronic sales underwhelmed all year, and the box office never found its footing. At the same time, we made solid progress in many important areas, including strong momentum and content creation and new partner wins, particularly in music, sports, and automotive. We're excited about the growth opportunities going forward. We're seeing good momentum for Dolby Atmos and Dolby Vision. The GE licensing business gives us a stronger position in imaging patents, and we expect the Theo acquisition to accelerate our emerging Dolby I.O. business. I'd like to spend a few minutes on some Q4 highlights before I share some perspectives on FY25. Starting with content, one of the most important aspects of our ecosystem Sports and music are growing in their ability to drive the business forward. First, with sports, we spoke last quarter about the increasing amount of sports content available in Dolby, with major events including Wimbledon, the Olympics, soccer, and cricket, as well as the decision by Max to stream all of its live sports content in Dolby Atmos and Dolby Vision. This fall, both Major League Baseball Championship Series were broadcast in Dolby Atmos and Dolby Vision on Max, and the World Series was broadcast in Dolby Vision on Fox. We also had wins in important regional markets, including e-gaming in China with the League of Legends finals streaming live in Dolby Atmos, and more e-gaming in India with the Battlegrounds Grand Finals premiering in Dolby Atmos on Disney Star. And we continue to have strong traction in Dolby Atmos and Dolby Vision in TV and movies, including Netflix, Disney, and Apple. Turning to music, the momentum continues to build with over 1,200 studios globally equipped with Dolby Atmos capabilities. and over 90% of Billboard's global top 100 artists having released music in Dolby Atmos. Music is a big driver for multiple device categories and is the number one driver for Dolby Atmos adoption on automotive. Speaking of automotive, we continue to make good progress. We came into the year with 10 OEM partners for Dolby Atmos. During the year, we more than doubled that. So entering 2025, we have more than 20 partners and a strong pipeline. In the fourth quarter, we signed up two more partners, Wei, a Chinese car company that specializes in premium crossovers and SUVs, and Smart, a joint venture between Mercedes and Geely. The in-car entertainment experience is an investment priority for automotive OEMs and remains a bright spot for us going forward. In TVs, we're seeing growth of Dolby Atmos and Dolby Vision in mid-range TVs, complementing strong adoption in higher-end TVs. TCL and Hisense continue to grow their adoption, while brands like Philips, Xiaomi, BPL in India, and Polytron in Indonesia are rolling out Dolby Atmos and Dolby Vision on more affordable TVs. Our speaker and soundbar partners, including TCL, JBL, Yamaha, Klipsch, and Sharp, announced new products with Dolby Atmos. And Vizio announced the first Dolby Atmos-enabled soundbar to retail for less than $100. Meta announced that in the MetaQuest, its mixed-reality headset will include Dolby Atmos. So just to recap the quarter and the year, while consumer device sales remain soft and last year's strikes continued to impact the cinema business, we continue to increase the amount of content and the number of devices taking advantage of Dolby Atmos and Dolby Vision, bringing the Dolby experience to more people around the world. Looking forward to FY25, while the market forecast for aggregate device sales are flattish, we do see revenue from foundational audio technology stabilizing. We're excited about the momentum we have in automotive, and the progress we are making in growing adoption in mobile and TV. The GE deal adds to the strength of our imaging patent licensing portfolio. And Theo improves our opportunity with Dolby I.O. by bringing on a great roster of customers, including the NFL, NASCAR, and Sky, and a broader product portfolio in a compelling emerging market. The cinema industry is optimistic about the box office slate, which is good for our cinema business. We're confident about our long-term opportunities and our ability to generate growth. With that, I'd like to turn the call over to Robert to discuss the details of our financial performance.