Dolby Laboratories Reports Fourth Quarter and Fiscal 2021 Financial Results

11/16/2021, 10:15 PM (Source: GlobeNewswire)

SAN FRANCISCO, Nov. 16, 2021 (GLOBE NEWSWIRE) -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's financial results for the fourth quarter and fiscal year that ended September 24, 2021. For the fourth quarter, Dolby reported total revenue of $285.0 million, compared to $271.2 million for the fourth quarter of fiscal 2020. For fiscal 2021, Dolby reported total revenue of $1.28 billion, compared to $1.16 billion for fiscal 2020.

"Dolby continues to expand the breadth and depth of Dolby Vision and Dolby Atmos experiences across a wider range of content in music, gaming, and live sports," said Kevin Yeaman, President and CEO, Dolby Laboratories. "We are also excited about the opportunity to drive future growth with initiatives like which enables developers to build high-quality, interactive and media-centric applications."

Fourth quarter GAAP net income was $44.2 million, or $0.42 per diluted share, compared to GAAP net income of $26.8 million, or $0.26 per diluted share, for the fourth quarter of fiscal 2020. On a non-GAAP basis, fourth quarter net income was $60.4 million, or $0.58 per diluted share, compared to $45.8 million, or $0.45 per diluted share, for the fourth quarter of fiscal 2020. Fourth quarter cash flows from operations was $109.8 million, compared to $112.7 million for the fourth quarter of fiscal 2020. A complete listing of Dolby's non-GAAP measures are described and reconciled to the corresponding GAAP measures at the end of this release.

Fiscal 2021 GAAP net income was $310.2 million, or $2.97 per diluted share, compared to $231.4 million, or $2.25 per diluted share, for fiscal 2020. On a non-GAAP basis, fiscal 2021 net income was $383.3 million, or $3.66 per diluted share, compared to $305.2 million, or $2.97 per diluted share, for fiscal 2020. Fiscal 2021 cash flows from operations was $447.8 million, compared to $343.8 million for fiscal 2020.

Recent Business Highlights

  • Mercedes-Benz announced that it will be offering Dolby Atmos in their Mercedes-Maybach and Mercedes-Benz S-Class models, and their optional Burmester sound system.
  • Dolby and MGM Resorts International launched Dolby Live at Park MGM – the first fully integrated performance venue to offer live concerts in Dolby Atmos.
  • Vimeo becomes the first all-in-one platform to support the playback of Dolby Vision content for the Apple ecosystem.
  • Microsoft launched the Surface Pro 8 and Surface Studio with Dolby Vision and Dolby Atmos – the first Microsoft Surface devices with Dolby Vision.


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. Since the initial outbreak of COVID-19, 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.

We expect continued uncertainty in global financial markets. Dolby’s financial results for the fourth quarter of fiscal 2021 rely on estimates of royalty-based revenue that take into consideration the macroeconomic effect of global events, including COVID-19, which may impact supply chain activities and consumer demand for electronic products. For more information, see the section captioned "Risk Factors" in our Annual Report on Form 10-K for fiscal 2021, filed on or around the date hereof.


Today, Dolby announced a cash dividend of $0.25 per share of Class A and Class B common stock, payable on December 8, 2021, to stockholders of record as of the close of business on November 30, 2021.

Financial Outlook - First 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 Annual Report on Form 10-K for fiscal 2021, filed on or around the date hereof.

First Quarter Fiscal 2022

Dolby is providing the following estimates for its first quarter of fiscal 2022:

  • Total revenue is estimated to range from $345 million to $375 million.
  • Gross margin percentages are anticipated to range from 90% to 91% on a GAAP basis and from 91% to 92% on a non-GAAP basis.
  • Operating expenses are anticipated to range from $221 million to $231 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 18% to 19% on both a GAAP and non-GAAP basis.
  • Diluted earnings per share is anticipated to range from $0.71 to $0.86 on a GAAP basis and from $0.98 to $1.13 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 $869 million to $889 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 $2.53 to $3.03 on a GAAP basis and from $3.52 to $4.02 on a non-GAAP basis.

Conference Call Information

Members of Dolby management will lead a conference call open to all interested parties to discuss fourth quarter and fiscal 2021 financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m. ET) on Tuesday, November 16, 2021. Access to the teleconference will be available at or by dialing 1-844-200-6205 (or dialing +1-929-526-1599 for international callers) and entering confirmation code 294217.

A replay of the call will be available from 5:00 p.m. PT (8:00 p.m. ET) on Tuesday, November 16, 2021, until 11:00 p.m. PT on Tuesday, November 23, 2021 (2:00 a.m. ET on Wednesday, November 24, 2021), by dialing 1-866-813-9403 (international callers can access the replay by dialing +44-204-525-0658) and entering the confirmation code 295957. An archived version of the teleconference will also be available on the Dolby website,

Non-GAAP Financial Information

To supplement Dolby's financial statements presented on a GAAP basis, Dolby provides certain non-GAAP financial measures to provide investors with 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. Specifically, we exclude the following as adjustments from one or more of our 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 we grant. These assumptions may differ from those used by other companies. To facilitate more meaningful comparisons between our underlying operating results and those of other companies, we exclude stock-based compensation expense.

Amortization of acquisition-related intangibles: We amortize intangible assets acquired in connection with acquisitions. These intangible assets consist of patents and technology, customer relationships, and other intangibles. We record amortization charges relating to these intangible assets in our GAAP financial statements, and we view these charges as items arising from pre-acquisition activities that are determined by the timing and valuation of our acquisitions. As these amortization charges do not directly correlate to our operations during any particular period, and often remain unchanged between reporting periods, we exclude these charges to facilitate an evaluation of our current operating results and comparisons to our past operating performance.

Restructuring charges: Restructuring charges are costs associated with restructuring plans and primarily relate to costs associated with exit or disposal activities, employee severance benefits, and asset impairments. We exclude restructuring costs, including any adjustments to charges recorded in prior periods, as we believe that these costs are not representative of our normal operating activities and therefore, excluding these amounts enables a more effective comparison to our past operating performance.

Income tax adjustments: We believe that excluding the income tax effect of the aforementioned non-GAAP adjustments provides a more accurate view of our underlying operating results to management and investors.

Other operating income adjustments: We are excluding a one-time gain on the sale of property, which was previously classified as held for sale, finalized during the first quarter of fiscal 2021. The property was 51% owned by the controlling interest, therefore 51% of the gain recognized has been attributed to the controlling interest.

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. Dolby's management does not itself, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, 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. 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,

Forward-Looking Statements

Certain statements in this press release, including, but not limited to, statements relating to Dolby's expected financial results for the first quarter of fiscal 2022 and fiscal 2022, our ability to advance our long-term objectives, and future dividend payments are "forward-looking statements" that are subject to 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 COVID-19 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; consumer demand for products that incorporate Dolby technologies; 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; the impact to the overall cinema market, including closures or limitations of cinema capacity and resulting adverse impact to Dolby’s revenue recognized on box-office sales and demand for cinema products and services; temporary Dolby office closures and other actions to protect Dolby’s workforce; and macroeconomic conditions that affect discretionary spending and access to products that contain Dolby technologies); risks associated with trends in the markets in which Dolby operates, including the Broadcast, Mobile, Consumer Electronics, PC, Cinema, and Other Markets; the loss of, or reduction in sales by, a key customer, partner, or licensee; pricing pressures; risks that the continued shift in content distribution from optical disc-based and other traditional media to online and streaming media content could result in fewer devices with Dolby technologies or less revenue from such devices; risks relating to conducting business internationally, including trade restrictions and changes in diplomatic or trade relationships; risks relating to the expiration of patents; 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 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 industry 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 our most recent annual report on Form 10-K. 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. We partner with artists, storytellers, developers, and businesses to revolutionize entertainment and communications with Dolby Atmos, Dolby Vision, Dolby Cinema, and

Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema,, 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

(in thousands, except per share amounts; unaudited)

 Fiscal Quarter Ended Fiscal Year Ended
 September 24,
September 25,
 September 24,
September 25,
Licensing$265,988  $256,904   $1,214,147  $1,078,577  
Products and services19,037  14,287   67,109  83,215  
Total revenue285,025  271,191   1,281,256  1,161,792  
Cost of revenue:     
Cost of licensing13,935  12,665   55,421  50,822  
Cost of products and services16,764  29,800   74,604  95,676  
Total cost of revenue30,699  42,465   130,025  146,498  
Gross margin254,326  228,726   1,151,231  1,015,294  
Operating expenses:     
Research and development61,966  61,726   253,640  239,045  
Sales and marketing98,466  81,396   332,671  335,933  
General and administrative54,193  55,581   224,161  219,753  
Gain on sale of assets     (13,871)   
Restructuring charges(664) (45)  10,240  1,821  
Total operating expenses213,961  198,658   806,841  796,552  
Operating income40,365  30,068   344,390  218,742  
Other income/(expense):     
Interest income816  494   3,493  12,725  
Interest expense(119) (55)  (479) (186) 
Other income, net1,996  3,985   7,108  8,434  
Total other income2,693  4,424   10,122  20,973  
Income before income taxes43,058  34,492   354,512  239,715  
(Provision for)/benefit from income taxes1,170  (7,516)  (36,689) (8,096) 
Net income including controlling interest44,228  26,976   317,823  231,619  
Less: net income attributable to controlling interest(37) (147)  (7,596) (256) 
Net income attributable to Dolby Laboratories, Inc.$44,191  $26,829   $310,227  $231,363  
Net income per share:     
Basic$0.44  $0.27   $3.07  $2.30  
Diluted$0.42  $0.26   $2.97  $2.25  
Weighted-average shares outstanding:     
Basic101,227  100,473   101,190  100,564  
Diluted104,369  102,722   104,622  102,944  

(in thousands; unaudited)

 September 24,
September 25,
Current assets:  
Cash and cash equivalents$1,225,380  $1,071,876  
Restricted cash7,652  8,103  
Short-term investments38,839  46,948  
Accounts receivable, net232,609  180,340  
Contract assets, net182,316  161,357  
Inventories, net10,965  25,550  
Prepaid expenses and other current assets62,737  53,022  
Total current assets1,760,498  1,547,196  
Long-term investments62,819  52,149  
Property, plant, and equipment, net534,381  541,963  
Operating lease right-of-use assets67,128  76,515  
Goodwill and intangible assets, net463,584  489,376  
Deferred taxes156,020  118,881  
Other non-current assets61,257  91,245  
Total assets$3,105,687  $2,917,325  
Current liabilities:  
Accounts payable$17,779  $12,617  
Accrued liabilities262,728  219,974  
Income taxes payable1,334  3,260  
Contract liabilities18,473  15,436  
Operating lease liabilities15,403  15,822  
Total current liabilities315,717  267,109  
Non-current contract liabilities23,713  24,342  
Non-current operating lease liabilities56,715  65,315  
Other non-current liabilities105,310  122,154  
Total liabilities501,455  478,920  
Stockholders’ equity:  
Class A common stock59  58  
Class B common stock41  41  
Retained earnings2,607,909  2,443,138  
Accumulated other comprehensive loss(10,030) (10,594) 
Total stockholders’ equity – Dolby Laboratories, Inc.2,597,979  2,432,643  
Controlling interest6,253  5,762  
Total stockholders’ equity2,604,232  2,438,405  
Total liabilities and stockholders’ equity$3,105,687  $2,917,325  

(in thousands; unaudited)

 Fiscal Year Ended
 September 24,
September 25,
Operating activities:  
Net income including controlling interest$317,823  $231,619  
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization95,860  90,878  
Stock-based compensation99,698  86,628  
Amortization of operating lease right-of-use assets16,897  21,006  
Amortization of premium on investments1,373  800  
Provision for/(benefit from) credit losses(2,889) 7,689  
Deferred income taxes(37,048) (5,274) 
Gain on sale of assets(13,871)   
Other non-cash items affecting net income(5,452) 10,920  
Changes in operating assets and liabilities:  
Accounts receivable, net(49,034) 1,251  
Contract assets(21,154) 34,297  
Inventories17,154  (11,784) 
Operating lease right-of-use assets(5,199) (34,522) 
Prepaid expenses and other assets17,165  (5,680) 
Accounts payable and accrued liabilities44,230  (43,545) 
Income taxes, net(2,975) (50,586) 
Contract liabilities2,361  (4,621) 
Operating lease liabilities(11,369) 15,618  
Other non-current liabilities(15,817) (845) 
Net cash provided by operating activities447,753  343,849  
Investing activities:  
Purchases of investment securities(67,101) (287,777) 
Proceeds from sales of investment securities10,892  244,517  
Proceeds from maturities of investment securities53,893  246,621  
Purchases of property, plant, and equipment(54,454) (66,347) 
Proceeds from sale of assets16,365    
Payments for business combinations, net of cash acquired(4,500)   
Purchase of intangible assets  (2,640) 
Net cash provided by/(used in) investing activities(44,905) 134,374  
Financing activities:  
Proceeds from issuance of common stock122,088  82,658  
Repurchase of common stock(245,864) (173,742) 
Payment of cash dividend(89,172) (88,581) 
Distribution to controlling interest(7,362) (283) 
Shares repurchased for tax withholdings on vesting of restricted stock(32,205) (23,065) 
Payment related to prior purchases of intangible assets  (91) 
Payment of deferred consideration for prior business combinations  (4,671) 
Net cash used in financing activities(252,515) (207,775) 
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash2,720  3,938  
Net increase in cash, cash equivalents, and restricted cash153,053  274,386  
Cash, cash equivalents, and restricted cash at beginning of period1,079,979  805,593  
Cash, cash equivalents, and restricted cash at end of period$1,233,032  $1,079,979  

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 fourth quarter and year-to-date period ended September 24, 2021 and September 25, 2020:
Net income:Fiscal Quarter Ended Fiscal Year-To-Date Ended
 September 24,
September 25,
 September 24,
September 25,
GAAP net income$44.2  $26.8   $310.2  $231.4 
Stock-based compensation (1)24.1  21.8   99.7  86.7 
Amortization of acquisition-related intangibles (2)2.7  2.5   10.2  10.7 
Restructuring charges(0.7)    10.2  1.9 
Income tax adjustments(9.9) (5.3)  (40.2) (25.5)
Other operating income adjustments     (6.8)  
Non-GAAP net income$60.4  $45.8   $383.3  $305.2 
(1) Stock-based compensation included in above line items:     
Cost of products and services$0.5  $0.5   $2.1  $2.0 
Research and development 7.3   6.3    29.7   25.7 
Sales and marketing 8.2   8.2    36.4   32.0 
General and administrative 8.1   6.8    31.5   27.0 
(2) Amortization of acquisition-related intangibles included in above line items:        
Cost of licensing$0.7  $0.7   $2.8  $3.1 
Cost of products and services0.9  0.9    3.6  3.6 
Research and development0.1  0.1    0.4  0.7 
Sales and marketing1.0  0.8    3.4  3.3 
Diluted earnings per share:Fiscal Quarter Ended Fiscal Year-To-Date Ended
 September 24,
September 25,
 September 24,
September 25,
GAAP diluted earnings per share$0.42  $0.26   $2.97  $2.25 
Stock-based compensation0.22  0.21   0.95  0.84 
Amortization of acquisition-related intangibles0.04  0.03   0.10  0.10 
Restructuring charges(0.01)    0.10  0.02 
Income tax adjustments(0.09) (0.05)  (0.38) (0.24)
Other operating income adjustments     (0.08)  
Non-GAAP diluted earnings per share$0.58  $0.45   $3.66  $2.97 
Shares used in computing diluted earnings per share104  103   105  103 
The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial amounts for the first quarter of fiscal 2022 and fiscal 2022 included in this release:
Gross margin:    Q1 2022
GAAP gross margin (low - high end of range)    90% - 91%
Stock-based compensation    0.3%
Amortization of acquisition-related intangibles    0.7%
Non-GAAP gross margin (low - high end of range)    91% - 92%
Operating expenses: Q1 2022  Fiscal 2022
GAAP operating expenses (low - high end of range) $221 - $231  $869 - $889
Stock-based compensation (30)    (115)
Amortization of acquisition-related intangibles (1)    (4)
Non-GAAP operating expenses (low - high end of range) $190 - $200  $750 - $770
Operating margin:    Fiscal 2022
GAAP operating margin (low - high end of range)    24% - 26%
Stock-based compensation    9.0%
Amortization of acquisition-related intangibles    1.0%
Non-GAAP operating margin (low - high end of range)    34% - 36%
Diluted earnings per share:Q1 2022 Fiscal 2022
 LowHigh LowHigh
GAAP diluted earnings per share$0.71  $0.86   $2.53  $3.03 
Stock-based compensation0.30  0.30   1.13  1.13 
Amortization of acquisition-related intangibles0.03  0.03   0.09  0.09 
Income tax adjustments(0.06) (0.06)  (0.23) (0.23)
Non-GAAP diluted earnings per share$0.98  $1.13   $3.52  $4.02 
Shares used in computing diluted earnings per share104  104   104  104 

Investor Contact:
Ashley Schwenoha
Dolby Laboratories, Inc.

Media Contact:
Karen Hartquist
Dolby Laboratories, Inc.


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