Dolby Laboratories, Inc.

Previous wording

We generated over 90%of our revenue in thesecond quarters of fiscal 2026 and fiscal 2025, and the fiscal year-to-date periods ended March 27, 2026 and March 28, 2025 from agreements to license branded technology and patents that enable approximately 1,000 electronic device manufacturers to enable and enhance the audio and visual capabilities of their products by incorporating our technology. As of March 27, 2026, we had approximately 30,200 issued patents relating to technologies, that are licensed to third parties and comprise a significant portion of our licensing revenue. We have approximately 1,500 trademark registrations throughout the world for a variety of wordmarks, logos, and slogans. These trademarks are an integral part of our technology licensing program as licensees typically place them on their products that incorporate our technologies to inform consumers that they have met our quality specifications.

Current wording

We generated over 90%of our revenue in thethird quarters of fiscal 2026 and fiscal 2025, and the fiscal year-to-date periods ended June 26, 2026 and June 27, 2025 from agreements to license branded technology and patents that enable approximately 1,000 electronic device manufacturers to enable and enhance the audio and visual capabilities of their products by incorporating our technology. As of June 26, 2026, we had approximately 30,100 issued patents relating to technologies, that are licensed to third parties and comprise a significant portion of our licensing revenue. We have approximately 1,600 trademark registrations throughout the world for a variety of wordmarks, logos, and slogans. These trademarks are an integral part of our technology licensing program as licensees typically place them on their products that incorporate our technologies to inform consumers that they have met our quality specifications.

Previous wording

Dolby OptiView is delivering immersive, interactive, and social experiences with real-time engagement for live events, especially sports. Dolby OptiView leverages Dolby’s six decades of experience in the science of sight and sound to deliver video with clarity, depth, and detail via our unique content delivery system which ensures a high quality, synchronized viewer experience across the globe. This enables our customers to engage viewers effectively with near real time interaction tools that will strengthen connections and drive participation.

Current wording

Dolby OptiView is our unique content delivery system enabling immersive, interactive, and social experiences with real-time engagement for live events, for example live sports. Dolby OptiView comprises a number of products that work individually or together to optimize these experiences. Dolby OptiView ensures a high-quality, synchronized viewer experience across the globe, with minimal delay – as low as sub-second. This enables our customers to engage viewers effectively with interaction tools that strengthen connections and drive participation. Dolby OptiView Ads is an ad delivery system that increases the impact of ads delivered with video services through just-in-time delivery, personalization, and customizable on-screen presentation. Dolby OptiView Ads integrates with advertising platforms like Google Ad Manager.

Previous wording

We generated 94% and 94%of our revenue in thesecond quarters of fiscal 2026 and fiscal 2025, respectively, and 93% and 93% of the fiscal year-to-date periods ended March 27, 2026 and March 28, 2025, respectively, through licensing our technology, brand, and patents, primarily to device manufacturers. The following table presents the end market composition of revenue from our licensing business for all periods presented:

Current wording

We generated 93% and 92%of our revenue in thethird quarters of fiscal 2026 and fiscal 2025, respectively, and 93% and 93% of the fiscal year-to-date periods ended June 26, 2026 and June 27, 2025, respectively, through licensing our technology, brand, and patents, primarily to device manufacturers. The following table presents the end market composition of revenue from our licensing business for all periods presented:

Previous wording

We are focused on expanding our leadership in audio and imaging solutions for premium entertainment content by increasing the number of Dolby experiences that people can enjoy, which will drive revenue growth across the markets we serve. We work across our ecosystem of partners including creators, distributors, and device manufacturers to increase the number of Dolby experiences that people can enjoy by enhancing content, including movies and TV, music and live sports, using Dolby branded technologies. Increased content in these areas increases our value proposition across our end markets. In movies and TV, thousands of movie titles and tens of thousands of TV episodes have been created and released in Dolby Atmos and/or Dolby Vision. Major streaming services such as Netflix, Disney+, Apple TV, Amazon, HBO Max, Paramount+, Peacock, and other streaming services internationally, continue to enhance content in Dolby Vision and/or Dolby Atmos. Amazon Prime recently announced that it has added support for Dolby Vision to its ad-supported tier. In the second quarter of fiscal 2026, various sport events were shown in Dolby Atmos and/or Dolby Vision including the Super Bowl, the 2026 Olympic Winter Games, and the ICC Men's T20 Cricket World Cup. Additionally, Apple is currently streaming the 2026 Formula One season in Dolby Vision.

Current wording

We are focused on expanding our leadership in audio and imaging solutions for premium entertainment content by increasing the number of Dolby experiences that people can enjoy, which will drive revenue growth across the markets we serve. We work across our ecosystem of partners including creators, distributors, and device manufacturers to increase the number of Dolby experiences that people can enjoy by enhancing content, including movies and TV, music and live sports, using Dolby branded technologies. Increased content in these areas increases our value proposition across our end markets. In movies and TV, thousands of movie titles and tens of thousands of TV episodes have been created and released in Dolby Atmos and/or Dolby Vision. Major streaming services such as Netflix, Disney+, Apple TV, Amazon, HBO Max, Paramount+, Peacock, and other streaming services internationally, continue to enhance content in Dolby Vision and/or Dolby Atmos. Recently, the 2026 FIFA World Cup was shown in Dolby Atmos and/or Dolby Vision across various broadcast, streaming, and pay TV, including Peacock and Comcast in the U.S., Bell TV in Canada, and TV GLOBAL in Brazil.

Previous wording

The following are highlights from our second quarter of fiscal 2026 and key challenges related to Dolby's licensing businesses, by market.

Current wording

The following are highlights from our third quarter of fiscal 2026 and key challenges related to Dolby's licensing businesses, by market.

Previous wording

We have an established global presence and broad adoption of our branded audio and patent licensing technologies in broadcast services and devices, which primarily include TVs and STBs. We work with many TV OEMs and strategic partners to enable and promote Dolby Vision and Dolby Atmos experiences within their TV lineups. We have strong attach rates for Dolby Atmos and Dolby Vision with high end TVs and continue to grow adoption on mid-range TVs. Many partners continue to expand their support of the combined Dolby Vision and Dolby Atmos experience. At CES in January 2026, Philips, Hisense, and TCL all announced various upcoming TV models that will support Dolby Vision 2.

Current wording

We have an established global presence and broad adoption of our branded audio and patent licensing technologies in broadcast services and devices, which primarily include TVs and STBs. We work with many TV OEMs and strategic partners to enable and promote Dolby Vision and Dolby Atmos experiences within their TV lineups. We have strong attach rates for Dolby Atmos and Dolby Vision with high end TVs and continue to grow adoption on mid-range TVs. Many partners continue to expand their support of the combined Dolby Vision and Dolby Atmos experience. Dolby Vision 2 is now in market with some Hisense TVs, and by the end of this calendar year, TCL and Philips will also be shipping TVs with Dolby Vision 2.

Previous wording

We continue to promote adoption of our technologies across major mobile ecosystems, including Apple and Android. Our patent licensing technologies are adopted broadly throughout the mobile device ecosystem. Dolby Atmos and Dolby Vision are included throughout the Apple device line-up and in Apple TV, and Dolby Atmos is included in Apple Music. Dolby Vision Capture, Playback, and Dolby Atmos have been supported on all iPhones since the iPhone 12. We have strong adoption of Dolby Atmos and our branded audio codecs across high-end Android mobile devices and are focused on growing our presence on low and mid-tier phones. An increasing number of Android device manufacturers have adopted Dolby Vision and Dolby Vision Capture on high end devices and we are focused on the opportunity to significantly increase our adoption. The breadth of mobile devices supporting Dolby technologies continues to increase globally. Xiaomi recently announced its flagship Redmi Note 15 Pro series that supports Dolby Vision, Dolby Vision Capture, and Dolby Atmos. Vivo released the X300 Ultra camera phone supporting Dolby Vision, as well as the iQOO 1500 Ultra from its gaming-focused sub-brand, which supports Dolby Atmos and Dolby Vision. Additionally, Douyin, the Chinese version of TikTok, supports content in Dolby Vision on both iOS and Android mobile phones.

Current wording

We continue to promote adoption of our technologies across major mobile ecosystems, including Apple and Android. Our patent licensing technologies are adopted broadly throughout the mobile device ecosystem. Dolby Atmos and Dolby Vision are included throughout the Apple device line-up and in Apple TV, and Dolby Atmos is included in Apple Music. Dolby Vision Capture, Playback, and Dolby Atmos have been supported on all iPhones since the iPhone 12. We have strong adoption of Dolby Atmos and our branded audio codecs across high-end Android mobile devices and are focused on growing our presence on low and mid-tier phones. An increasing number of Android device manufacturers have adopted Dolby Vision and Dolby Vision Capture on high end devices and we are focused on the opportunity to significantly increase our adoption. We increasingly see adoption of our technologies in other personal, battery powered electronics, including devices providing augmented reality and virtual reality experiences. The breadth of mobile devices supporting Dolby technologies continues to increase globally. In the third quarter of fiscal 2026, RayNeo, the leading provider of augmented reality glasses, launched the RayNeo GT Max, the first AR smart glasses supporting Dolby Vision. Also in the third quarter of fiscal 2026, Insta360, a leader in the action and panoramic cameras segments, launched the Luna Ultra, which supports Dolby Vision capture.

Previous wording

We generate revenue from the automotive industry primarily through the adoption of Dolby Atmos in cars. As of the end of the second quarter of fiscal 2026, we have announced partnerships with over 35 car makers that are shipping or have announced models that support our technologies, up from over 20 car makers at the end of fiscal 2025. At the Beijing Auto Show in April 2026, BMW announced that its BMW 7 series and the BMW iX3 Long Wheelbase will support Dolby Atmos. BYD announced the Denza Z9GT as its first Dolby Atmos-enabled car to service the European market. Also in the second quarter of fiscal 2026, Lexus announced its first Dolby Atmos-enabled car, and Firefly, a sub-brand of NIO, launched Dolby Atmos-enabled cars in Singapore and Thailand.

Current wording

We generate revenue from the automotive industry primarily through the adoption of Dolby Atmos in cars. As of the end of the third quarter of fiscal 2026, we have announced partnerships with over 40 car makers that are shipping or have announced models that support our technologies, up from over 20 car makers at the end of fiscal 2025. In the third quarter of fiscal 2026, Google announced support for Dolby Atmos through Android Auto with partners including BMW, Genesis, Mahindra, Mercedes, Renault, and Skoda. Recently, Volkswagen launched its first Dolby Atmos-enabled vehicle in China, the fully electric SUV ID, and Buick announced pre-sales for the Electra E7 in China, which supports Dolby Atmos.

Previous wording

Highlights: We continue to expand our global presence for Dolby Cinema, with sites located in the U.S. and internationally. Additionally, we increased the number of Dolby Atmos and Dolby Vision theaters or exhibitors in Austria, South Korea, and Vietnam.

Current wording

Highlights: We continue to expand our global presence for Dolby Cinema, with sites located in the U.S. and internationally. Additionally, we increased the number of Dolby Atmos and Dolby Vision theaters or exhibitors in Taiwan, Vietnam, and Germany.

Previous wording

To help enable the playback of content in Dolby formats, we offer a range of servers, which include the IMS3000 (an integrated imaging and audio server with Dolby Atmos), and audio processors, such as the CP950, to cinema exhibitors globally. Dolby Atmos has been adopted broadly across studios, content creators, post-production facilities, and exhibitors. As of the end of the second quarter of fiscal 2026, there are over 8,600 Dolby Atmos screens installed or committed and over 4,500 Dolby Atmos theatrical titles have been announced or released.

Current wording

To help enable the playback of content in Dolby formats, we offer a range of servers, which include the IMS3000 (an integrated imaging and audio server with Dolby Atmos), and audio processors, such as the CP950, to cinema exhibitors globally. Dolby Atmos has been adopted broadly across studios, content creators, post-production facilities, and exhibitors. As of the end of the third quarter of fiscal 2026, there are over 8,600 Dolby Atmos screens installed or committed and over 4,500 Dolby Atmos theatrical titles have been announced or released.

Previous wording

Our strategy for Dolby OptiView is to expand our addressable market by offering solutions that increase audience engagement to companies building real-time digital experiences. For instance, Optiview enables the delivery of high-quality audiovisual content with ultra-low latency so that viewers can interact with live content as if they are there in real life.

Current wording

Our strategy for Dolby OptiView is to expand our addressable market by offering solutions that increase audience engagement to companies building real-time digital experiences.

Previous wording

In September 2025, we initiated restructuring actions in order to centralize teams into fewer locations, relocate certain roles to provide better access to talent pools, encourage multi-disciplinary collaboration, and simplify operations. In continuation with this plan, we recorded expenses in the second quarter of fiscal 2026 of $2.2 million and in the fiscal year-to-date period ended March 27, 2026 of $12.7 million consisting primarily of severance and other related benefits. The majority of the remaining components of this plan were substantially completed by the end of the second quarter of fiscal 2026. Cash payment of the severance and other termination benefits are expected to be substantially completed by the end of the third quarter of fiscal 2026. These activities are expected to result in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2026, due to estimated savings in compensation and benefits of impacted employees. The impact of these estimated savings on our operating expenses will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Current wording

In September 2025, we initiated restructuring actions in order to centralize teams into fewer locations, relocate certain roles to provide better access to talent pools, encourage multi-disciplinary collaboration, and simplify operations. In continuation with this plan, we recorded expense in the fiscal year-to-date period ended June 26, 2026 of $12.7 million consisting primarily of severance and other related benefits. The majority of the remaining components of this plan were substantially completed by the end of the second quarter of fiscal 2026. Cash payment of the severance and other termination benefits were substantially completed by the end of the third quarter of fiscal 2026. These activities are expected to result in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2026, due to estimated savings in compensation and benefits of impacted employees. The impact of these estimated savings on our operating expenses will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Previous wording

In November 2024, we initiated restructuring actions with the purpose of aligning our R&D resources, and to a lesser extent our S&M resources, with our highest strategic priorities. In connection with this plan, we recorded expense in the second quarter of fiscal 2025 of $3.9 million and in the fiscal year-to-date period ended March 28, 2025 of $9.7 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2025. These activities resulted in gross pre-tax operating income savings of approximately $20 million in fiscal 2025, due to savings in compensation and benefits of impacted employees, which was consistent with our expectations. The impact of these savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Current wording

In November 2024, we initiated restructuring actions with the purpose of aligning our R&D resources, and to a lesser extent our S&M resources, with our highest strategic priorities. In connection with this plan, we recorded expense in the fiscal year-to-date period ended June 27, 2025 of $9.2 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2025. These activities resulted in gross pre-tax operating income savings of approximately $20 million in fiscal 2025, due to savings in compensation and benefits of impacted employees, which was consistent with our expectations. The impact of these savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Previous wording

As of March 27, 2026, we had cash and cash equivalents of $594.3 million, which consisted of cash and highly liquid money market funds. In addition, we had short and long-term investments of $81.7 million, which primarily consisted of equity method investments and equity securities without a readily determinable fair value.

Current wording

As of June 26, 2026, we had cash and cash equivalents of $669.4 million, which consisted of cash and highly liquid money market funds. In addition, we had short and long-term investments of $87.1 million, which primarily consisted of equity method investments and equity securities without a readily determinable fair value.

Previous wording

Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. In the second quarter of fiscal 2026, a quarterly dividend of $0.36 per share was paid on our Class A and Class B common stock to eligible stockholders of record. On April 30, 2026, Dolby announced a cash dividend of $0.36 per share of Class A and Class B common stock, payable on May 20, 2026, to stockholders of record as of the close of business on May 12, 2026.

Current wording

Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. In the third quarter of fiscal 2026, a quarterly dividend of $0.36 per share was paid on our Class A and Class B common stock to eligible stockholders of record. On July 30, 2026, Dolby announced a cash dividend of $0.36 per share of Class A and Class B common stock, payable on August 19, 2026, to stockholders of record as of the close of business on August 11, 2026.

Previous wording

Net cash provided by operating activities decreased $134.4 million in the fiscal year-to-date period ended March 27, 2026 as compared to the fiscal year-to-date period ended March 28, 2025, primarily due to the following:

Current wording

Net cash provided by operating activities decreased $34.6 million in the fiscal year-to-date period ended June 26, 2026 as compared to the fiscal year-to-date period ended June 27, 2025, primarily due to the following:

Previous wording

Net cash provided by investing activities was $62.6 million lower in the fiscal year-to-date period ended March 27, 2026 as compared to the fiscal year-to-date period ended March 28, 2025, primarily due to the following:

Current wording

Net cash provided by investing activities was $66.0 million lower in the fiscal year-to-date period ended June 26, 2026 as compared to the fiscal year-to-date period ended June 27, 2025, primarily due to the following:

Previous wording

Net cash used in financing activities was $99.3 million higher in the fiscal year-to-date period ended March 27, 2026 as compared to the fiscal year-to-date period ended March 28, 2025, primarily due to the following:

Current wording

Net cash used in financing activities was $129.5 million higher in the fiscal year-to-date period ended June 26, 2026 as compared to the fiscal year-to-date period ended June 27, 2025, primarily due to the following:

Previous wording

In the second quarter of fiscal 2026, we did not enter into any off-balance sheet arrangements that are expected to have a material effect on Dolby's liquidity or the availability of capital resources.

Current wording

In the third quarter of fiscal 2026, we did not enter into any off-balance sheet arrangements that are expected to have a material effect on Dolby's liquidity or the availability of capital resources.

Previous wording

We are party to certain contractual agreements under which we have agreed to provide indemnification of varying scope and duration to the other party relating to our licensed IP. Since the terms and conditions of the indemnification clauses do not explicitly specify our obligations, we are unable to reasonably estimate the maximum potential exposure for which we could be liable. In addition, we have entered into indemnification agreements with our officers, directors, and certain employees, and our certificate of incorporation and bylaws contain similar indemnification obligations. For additional details regarding indemnification clauses within our contractual agreements, see Note 15 "Commitments and Contingencies" to our unaudited interim condensed consolidated financial statements.

Current wording

In limited cases, our contractual agreements contain a clause under which we agree to provide indemnification to the counterparty, most commonly to licensees in connection with licensing arrangements that include our IP. In such cases, the indemnification arrangements usually provide for limitations on the scope or amount of potential obligations. We have also, in certain limited instances, elected to defend our licensees from third party IP infringement claims even when not contractually required to do so. We have also entered into indemnification agreements with our officers, directors, and certain employees, and our bylaws contain similar indemnification obligations. For additional details regarding indemnification clauses within our contractual agreements, see Note 15 "Commitments and Contingencies" to our unaudited interim condensed consolidated financial statements.