Dolby Laboratories Inc

Previous wording

We generated over 90% of our revenue in thefirst quarter of fiscal 2025 from agreements to license branded technology and patents that enable approximately 1,000 electronic device manufacturers to enhance the audio and visual capabilities of their products by incorporating our technology. As of December 27, 2024, we had approximately 28,000 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.

Current wording

We generated over 90%of our revenue in thesecond quarters of fiscal 2025 and fiscal 2024, and the fiscal year-to-date periods ended March 28, 2025 and March 29, 2024 from agreements to license branded technology and patents that enable approximately 1,000 electronic device manufacturers to enhance the audio and visual capabilities of their products by incorporating our technology. As of March 28, 2025, we had approximately 26,700 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.

Previous wording

•DD+. DD+ is an advanced surround sound audio codec technology that enables the Dolby audio experience across home theaters, smartphones, operating systems, and browsers. A versatile, bandwidth efficient and scalable home theater grade audio codec for A/V content, DD+ is designed to deliver up to 7.1 channels of surround sound across multiple platforms and content types. It is also able to carry channel-based configurations.

Current wording

•DD+. DD+ is an advanced surround sound audio codec technology that enables the Dolby audio experience across home theaters, smartphones, operating systems, and browsers. A versatile, bandwidth efficient and scalable home theater grade audio codec for A/V content, DD+ is designed to deliver up to 7.1 channels of surround sound across multiple platforms and content types.

Previous wording

Some of our customers choose to enter into a minimum volume commitment where they commit to a certain minimum number of devices in exchange for a lower price per unit. If the customer sells more than the number of units they committed to, they pay a set per unit royalty for each incremental unit. These are annual and sometimes multiyear deals, where the value of the committed volume is generally recognized as revenue up front. These contract structures, as well as the occasional fixed fee contract whereby a licensee pays for unlimited units, are often selected by large customers and can also lead to variability in quarterly revenues.

Current wording

Some of our customers choose to enter into a minimum volume commitment where they commit to a certain minimum number of devices in exchange for a lower price per unit. If the customer sells more than the number of units they committed to, they pay a set per unit royalty for each incremental unit. These are annual and sometimes multiyear deals, where the value of the committed volume is generally recognized as revenue up front. These contract structures, as well as the occasional fixed fee contract whereby a licensee pays for unlimited units, are often selected by large customers and can also lead to variability in quarterly revenue.

Previous wording

Patent pools employ a variety of licensing revenue models, including per-unit and fixed-fee royalties, and sometimes include royalty caps or committed volume commitments in exchange for a lower price per unit. The fees charged for licensing pooled patents are initially determined by market forces - a careful balance of the need to compensate innovators with the desire to develop an active licensee base. This balance of licensor and licensee interests is also a core consideration in the development of non-fee licensing terms.

Current wording

Patent pools employ a variety of licensing revenue models, including per-unit and fixed-fee royalties, and sometimes include royalty caps or committed volume arrangements in exchange for a lower price per unit. The fees charged for licensing pooled patents are initially determined by market forces - a careful balance of the need to compensate innovators with the desire to develop an active licensee base. This balance of licensor and licensee interests is also a core consideration in the development of non-fee licensing terms.

Previous wording

From time to time, we also generate revenue via recoveries (“recoveries”), which is revenue attributable to unlicensed or under reported distribution of devices incorporating our technologies in prior periods, usually recovered as a part of a settlement. Within the Results of Operations section of Part I, Item 2"Management's Discussion and Analysis of Financial Condition and Results of Operations," revenue attributable to previous periods' usage including settlements are collectively referred to as "recoveries." Recoveries are a reoccurring element of our business and are subject to fluctuation and unpredictability.

Current wording

We also generate licensing revenue via recoveries, which is revenue attributable to unlicensed or under-reported distribution of products incorporating our technologies in prior periods. Recoveries arise in the context of both branded technology licensing and patent licensing, and usually result from a settlement following a licensee audit under an existing license agreement, or as part of back-royalties paid in connection with a license agreement with a new licensee. Within the Results of Operations section of Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations," revenue attributable to previous periods' usage including settlements are collectively referred to as "recoveries." Recoveries are a recurring element of our business and are subject to fluctuation and unpredictability.

Previous wording

We leverage our universe of creative talent to bring the highest quality experiences to our exhibitor partners. Dolby Cinemas are Premium Large Format (PLF) cinemas that deliver a Dolby branded premium cinema offering with Dolby Vision, Dolby Atmos, and a proprietary Dolby theater design. We typically provide Dolby Cinema exhibitors with the requisite Dolby technology at minimal or no upfront cost and generate revenue from these sites through a share of box office receipts, which we recognize as licensing revenue. Dolby Cinemas deliver a unique, high-end theatre experience, that is different from competing PLFs as well as our exhibitor partner’s other theaters that use Dolby manufactured and distributed cinema hardware, including those that may utilize Dolby Atmos and/or Dolby Vision.

Current wording

We leverage our universe of creative talent to bring the highest quality experiences to our exhibitor partners. Dolby Cinemas are PLF cinemas that deliver a Dolby branded premium cinema offering with Dolby Vision, Dolby Atmos, and a proprietary Dolby theater design. We typically provide Dolby Cinema exhibitors with the requisite Dolby technology at minimal or no upfront cost and generate revenue from these sites through a share of box office receipts, which we recognize as licensing revenue. Dolby Cinemas deliver a unique, high-end theatre experience, that is different from competing PLFs as well as our exhibitor partner’s other theaters that use Dolby manufactured and distributed cinema hardware, including those that may utilize Dolby Atmos and/or Dolby Vision.

Previous wording

In addition, we offer various services to support theatrical and television production for cinema, broadcast, and home entertainment, including equipment training and maintenance, mixing room alignment, equalization, as well as audio, color, and light image calibration. We also provide PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners and support the implementation of our technologies into products manufactured by our licensees.

Current wording

In addition, we offer various services to support theatrical and television production for cinema, broadcast, and home entertainment, including equipment training and maintenance, mixing room alignment, equalization, as well as audio, color, and light image calibration. We also provide PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners, and we support the implementation of our technologies into products manufactured by our licensees.

Previous wording

Dolby.io is powering the next generation of immersive, interactive, and social experiences with real-time engagement for live events, especially sports. Dolby.io leverages Dolby’s six decades of experience in the science of sight and sound to deliver 4K video with clarity, depth and detail via our unique content delivery architecture that 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 (previously named Dolby.io) is powering 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 4K video with clarity, depth and detail via our unique content delivery architecture that 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.

Previous wording

Dolby.io represents a departure from our traditional distribution model which is focused on device manufacturers. Dolby.io is a software as a service (SaaS) product sold directly to enterprises via a consumption revenue model.

Current wording

Dolby OptiView is a software as a service (SaaS) product licensed directly to enterprises via a consumption-based revenue model.

Previous wording

We generated 93% of our revenues in thefirst quarter of fiscal 2025 by licensing technology, our 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 94% and 93% of our revenue in thesecond quarter of fiscal 2025 and the fiscal year-to-date period ended 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:

Previous wording

Our revenue can be impacted by macroeconomic conditions, including but not limited to, the financial health of our licensees, inflation, heightened interest rates, rising costs of material, increased shipping costs, international conflicts, labor disputes, reduced discretionary consumer spending, and reduced new product investment by our customers. The macroeconomic conditions also impart substantial uncertainty into our operating environment, which presents additional challenges for our business. These factors and the related uncertainty may cause delays or a decrease in the adoption or implementation of our technologies into new products by partners and licensees. These conditions may impact consumer demand for devices and services and our partners’ ability to manufacture devices. Further, the noted macroeconomic conditions and related uncertainty may negatively impact transaction cycles and our recovery of revenue associated with past unauthorized or unreported usage. The future implications of these macroeconomic conditions on our business, results of operations and overall financial position remain uncertain. We continue to monitor the evolving macroeconomic environment and the impact on our business. Further discussion of the potential impacts of these macroeconomic effects on our business can be found in Part II, Item 1A "Risk Factors."

Current wording

Macroeconomic conditions also impart substantial uncertainty into our operating environment and may lead to follow-on negative economic effects like recession or heightened inflation, each of which presents additional challenges for our business. Uncertainty or an adverse economic climate may cause delays or a decrease in the adoption of our technologies into new products by partners and licensees, or lead manufacturers to discontinue including our technology in their products or to seek price reductions. These conditions may impact consumer demand for our licensees’ products that incorporate our technology and for our own products and services. Further, the noted macroeconomic conditions and related uncertainty may negatively impact transaction cycles and our recovery of revenue associated with past unauthorized or unreported usage.

Previous wording

The majority of our revenue is derived from two licensing models: Branded Technology Licensing, and Patent Licensing. While each has had successes, they share certain challenges. In particular, factors such as global supply constraints or device lifecycles may impact licensing revenue. Further, in certain countries, we and other IP owners face difficulties enforcing contractual and IP rights, including instances in which our licensees fail to accurately report the shipment of products using our technologies. Finally, we face geopolitical challenges including changes in diplomatic and trade relationships, trade protection measures, and import or export licensing requirements. Further discussion of the potential impacts of the key challenges on our business can be found in Part II, Item 1A "Risk Factors."

Current wording

The majority of our revenue is derived from two licensing models: Branded Technology Licensing, and Patent Licensing. While each has had successes, they share certain challenges. In particular, factors such as global supply constraints or device lifecycles may impact licensing revenue. Further, in certain countries, we and other IP owners face difficulties enforcing contractual and IP rights, including instances in which our licensees fail to accurately report the shipment of products using our technologies. Finally, we face geopolitical challenges including changes in diplomatic and trade relationships, trade protection measures including the imposition of tariffs, and import or export licensing requirements. Further discussion of the potential impacts of the key challenges on our business can be found in Part II, Item 1A "Risk Factors."

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 partners and services such as Netflix, Disney+, Apple TV+, Amazon, Max, Paramount+, and other streaming partners and services internationally, continue to enhance content in Dolby Vision and Dolby Atmos. In social media, Xiaohongshu, which goes by the name RedNote in the U.S., supports 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 partners and services such as Netflix, Disney+, Apple TV+, Amazon, Max, Paramount+, and other streaming partners and services internationally, continue to enhance content in Dolby Vision and Dolby Atmos. In social media, Xiaohongshu, which goes by the name RedNote in the U.S., and Kuaishou, a Chinese social media platform specializing in short-form video content, both support Dolby Vision. In the video editing, CapCut supports Dolby Vision on both Android and iOS, and Filmora supports Dolby Vision on iOS with plans to support Android by the end of the calendar year. Also during the second quarter of fiscal 2025, the Super Bowl and March Madness were available in Dolby Atmos and Dolby Vision.

Previous wording

In fiscal 2024, we completed the acquisition of GE Licensing, which will strengthen our position in existing programs, most notably the HEVC video program. The GE Licensing transaction also yielded an increased ownership interest in Access Advance, a patent pool administrator. Income from our ownership interest in Access Advance is reflected as other income, net, in our unaudited interim condensed consolidated statements of operations.

Current wording

In fiscal 2024, we completed the acquisition of GE Licensing, which will strengthen our position in existing programs, most notably the HEVC video program. The GE Licensing transaction also yielded an increased ownership interest in Access Advance, a patent pool administrator. Income from our ownership interest in Access Advance is reflected as other income, net, in our unaudited interim condensed consolidated statements of operations. In the second quarter of fiscal 2025, we completed the disposition of most of the non-core assets acquired as part of the GE Licensing transaction to Dominion Harbor, an IP investment firm.

Previous wording

The following are highlights from our first quarter of fiscal 2025 and key challenges related to Dolby's licensing businesses, by market.

Current wording

The following are highlights from our second quarter of fiscal 2025 and key challenges related to Dolby's licensing businesses, by market.

Previous wording

Highlights: 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. In the first quarter of fiscal 2025, Amazon announced that the Fire TV Omni Mini-LED will support Dolby Atmos and Dolby Vision. At CES in January 2025, Hisense, TCL, Panasonic, Sharp, and RCA announced new TVs and TV-related devices that support our technologies. In the first quarter of fiscal 2025, TCL was added as a new HEVC video licensee.

Current wording

Highlights: 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 2025, Hisense, TCL, Panasonic, Sharp, and RCA announced new TVs and TV-related devices that support our technologies. Also in the second quarter of fiscal 2025, in the UK, Sky released the Sky Glass Gen 2 TV that supports Dolby Vision and a Dolby Atmos soundbar built into the TV. Additionally, LG announced the evo C5 and G5 TVs with Dolby Atmos and Dolby Vision, Sharp released 55GR8 TV with Dolby Vision IQ, and Hisense launched its flagship new LED TV product series, the E8Q and E8Q Pro – the first in the industry to be certified by both Dolby Vision and Pantone. Finally, Waipu.tv, a market leader in IPTV/OTT in Germany announced support for Dolby Atmos and Dolby Vision, and TOD, a leading streaming platform for sports and entertainment in the Middle East and Northern Africa, launched a 4K STB supporting Dolby Atmos and Dolby Vision.

Previous wording

Highlights: 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 has been supported on all iPhones since the iPhone 12 and the release of the iOS 18 unlocked support for higher frame rates. 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. In the first quarter of fiscal 2025, smartphone manufacturer BLU Products took a license to Via LA’s AVC patent pool.

Current wording

Highlights: 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 has been supported on all iPhones since the iPhone 12 and the release of the iOS 18 unlocked support for higher frame rates. 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. Recently, OPPO launched the Find X8 Ultra, Find X8s, and Find X8s+, all supporting Dolby Vision capture and playback.

Previous wording

Highlights: We have an established presence in the home entertainment market across devices such as wireless and smart speakers, soundbars, DMAs (devices that connect a computer to a home media system), and AVRs, through the inclusion of our branded audio codecs, and increasingly through the inclusion of Dolby Atmos and Dolby Vision. Our patent licensing technologies also have broad adoption in the home entertainment market. We continue to focus on expanding the availability of Dolby technologies to new devices. In the first quarter of fiscal 2025, Amazon launched their first Amazon soundbar, which supports our technologies. At CES in January 2025, Harman Kardon announced its new Enchant soundbar series, which supports Dolby Atmos, and Samsung's latest soundbars support Dolby Atmos as well.

Current wording

Highlights: We have an established presence in the home entertainment market across devices such as wireless and smart speakers, soundbars, DMAs (devices that connect a computer to a home media system), and AVRs, through the inclusion of our branded audio codecs, and increasingly through the inclusion of Dolby Atmos and Dolby Vision. Our patent licensing technologies also have broad adoption in the home entertainment market. We continue to focus on expanding the availability of Dolby technologies to new devices. At CES in January 2025, Harman Kardon announced its new Enchant soundbar series that supports Dolby Atmos, and Samsung announced that its soundbars would support Dolby Atmos. Also recently, Sonos, Vizio, and Teufel released soundbars with Dolby Atmos.

Previous wording

Highlights: DD+ enhances audio playback in Mac computers through the operating system with native support in the Safari browser, and Windows-based PCs through PC OEM implementations and native support in the Microsoft Edge browser. Dolby's presence in these browsers enables us to reach more users through various types of content, including streaming video entertainment. A number of personal computers from partners such as Apple, Lenovo, Dell, Samsung, Microsoft and ASUS also support Dolby Vision and/or Dolby Atmos, with continued expansion of applications through music, streaming, and gaming. In the first quarter of fiscal 2025, HP was added as a new HEVC video licensee. At CES in January 2025, ASUS, Dell, Lenovo, and Samsung announced a variety of new PC, laptop, and monitors across a range of consumer, gaming, and laptop supports, many of which support Dolby Vision and/or Dolby Atmos.

Current wording

Highlights: DD+ enhances audio playback in Mac computers through the operating system with native support in the Safari browser, and Windows-based PCs through PC OEM implementations and native support in the Microsoft Edge browser. Dolby's presence in these browsers enables us to reach more users through various types of content, including streaming video entertainment. A number of personal computers from partners such as Apple, Lenovo, Dell, Samsung, Microsoft, and ASUS also support Dolby Vision and/or Dolby Atmos, with continued expansion of applications through music, streaming, and gaming. At CES in January 2025, ASUS, Dell, Lenovo, and Samsung announced a variety of new PCs, laptops, and monitors across a range of consumer, gaming, and laptop supports, many of which support Dolby Vision and/or Dolby Atmos.

Previous wording

Key Challenges: Demand for personal computers has fluctuated significantly in recent years. We must continuously collaborate and maintain our key partnerships with personal computer manufacturers to incorporate our technologies, and we must continue to support the development and distribution of Dolby content via various ecosystems. To the extent that personal computer manufacturers do not incorporate our technologies in current and future products, our revenue could be impacted. Beginning with PCs shipping with Windows 11, version 24H2, Microsoft is changing the way Dolby’s DD and DD+ decoders are provided to third party personal computer OEMs. For such devices, Dolby has begun distributing those codecs directly to personal computer OEMs instead of through Microsoft’s Windows operating system. We do not expect this change to have a material impact on our revenue.

Current wording

Key Challenges: Demand for personal computers has fluctuated significantly in recent years. We must continuously collaborate and maintain our key partnerships with personal computer manufacturers to incorporate our technologies, and we must continue to support the development and distribution of Dolby-enabled content via various ecosystems. To the extent that personal computer manufacturers do not incorporate our technologies in current and future products, our revenue could be impacted.

Previous wording

Highlights: We generate revenue from the automotive industry primarily through the adoption of Dolby Atmos in cars. At CES in January 2025, Pioneer, the biggest manufacturer of after-market car audio systems, demonstrated how Dolby Atmos could be used in an aftermarket solution using a 4-channel speaker system. We also demonstrated Dolby Vision in the car with Li Auto. Additionally, we announced partnerships with over 20 OEMs, and those OEM brands have over 60 models in market with Dolby Atmos. For example, one of our earliest partners, Mercedes, had over 15 models in market by the end 2024. Also at CES, Samsung Display is working with Dolby to pre tune its cutting edge OLED displays for autos to deliver Dolby Vision to more cars, and Texas Instruments announced that it would support Dolby Atmos in its new family of chips for automakers.

Current wording

Highlights: We generate revenue from the automotive industry primarily through the adoption of Dolby Atmos in cars. For example, one of our earliest partners, Mercedes, had over 15 Atmos-enabled models in market by the end 2024. At CES in January 2025, Pioneer, the biggest manufacturer of after-market car audio systems, demonstrated how Dolby Atmos could be used in an aftermarket solution using a 4-channel speaker system. We also demonstrated Dolby Vision in the car with Li Auto. Also at CES, Samsung Display announced they will be working with Dolby to pre tune its cutting edge OLED displays for autos to ease manufacturers' adoption of Dolby Vision, and Texas Instruments announced that it would support Dolby Atmos in its new family of chips for automakers. In the second quarter of fiscal 2025, Porsche announced that Dolby Atmos will be supported in the Taycan, the Panamera, the Cayenne and the 911 in the 2026 models, and Cadillac announced that its entire EV lineup in 2026 will support Dolby Atmos. Volvo, Xiaomi, Hyundai, NIO, and Zeekr also recently announced new vehicle models that support our technologies.

Previous wording

Highlights: We continue to expand our global presence for Dolby Cinema, with sites located in the U.S. and internationally. The breadth of movie content for Dolby Cinema continues to grow with films available in Dolby Atmos and Dolby Vision accounting for over 80% of U.S. Box Office revenue as of the end of the first quarter of fiscal 2025.

Current wording

Highlights: We continue to expand our global presence for Dolby Cinema, with sites located in the U.S. and internationally. In the second quarter of fiscal 2025, we announced with AMC that we will add an additional 40 Dolby Cinemas at AMC locations in the United States through the end of calendar year 2027. The breadth of movie content for Dolby Cinema continues to grow with films available in Dolby Atmos and/or Dolby Vision accounting for over 85% of U.S. Box Office revenue during the second quarter of fiscal 2025. Subsequent to the second quarter of fiscal 2025, we announced that we are launching Dolby Cinema in India this year, beginning with six exhibitors in major cities in India, and we also increased the number of Dolby Atmos and Dolby Vision theaters in South Korea. Additionally, we announced an expansion of our partnership with AMC Entertainment that will add 40 Dolby Cinema screens at select locations nationwide by 2027.

Previous wording

A majority of our products and services revenue is derived from the sale of audio and imaging products for the cinema industry. Revenue from Dolby.io is also included in products and services.

Current wording

A majority of our products and services revenue is derived from the sale of audio and imaging products for the cinema industry. Revenue from Dolby OptiView is also included in products and services.

Previous wording

Highlights: 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 first quarter of fiscal 2025, there are over 8,300 Dolby Atmos screens installed or committed and over 3,800 Dolby Atmos theatrical titles have been announced or released.

Current wording

Highlights: 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 2025, there are over 8,300 Dolby Atmos screens installed or committed and over 3,800 Dolby Atmos theatrical titles have been announced or released.

Previous wording

Key Challenges: Demand for our cinema products is dependent upon our partners and their success in the market, industry and economic cycles, box office performance, and our ability to develop and introduce new technologies, further our relationships with content creators, and promote new cinematic audio and video experiences. A significant portion of our growth opportunity lies in international markets, which are subject to geopolitical risks. Additionally, weakness in general economic conditions due to inflation, recession, pandemic or other worsening economic conditions could have a negative impact on our cinema-related revenue due to reduced consumer discretionary spending. We may also be faced with pricing pressures or competing technologies, which would affect our revenue. In addition, supply chain constraints may impact our ability to provide cinema products and services to our customers. Long lead times and increased cost of materials due to the macroeconomic conditions, including higher interest rates have also negatively impacted the financial health of our cinema customers and partners, leading to reduced new product investment and lower demand.

Current wording

Key Challenges: Demand for our cinema products is dependent upon our partners and their success in the market, industry and economic cycles, box office performance, and our ability to develop and introduce new technologies, further our relationships with content creators, and promote new cinematic audio and video experiences. A significant portion of our growth opportunity lies in international markets, which are subject to geopolitical risks. Additionally, weakness in general economic conditions due to inflation, recession, the imposition of tariffs and other trade barriers, pandemic or other worsening economic conditions could have a negative impact on our cinema-related revenue due to reduced consumer discretionary spending. We may also be faced with pricing pressures or competing technologies, which would affect our revenue. In addition, supply chain constraints may impact our ability to provide cinema products and services to our customers. Long lead times and increased cost of materials due to the macroeconomic conditions, including higher interest rates have also negatively impacted the financial health of our cinema customers and partners, leading to reduced new product investment and lower demand.

Previous wording

Highlights: Our strategy for Dolby.io is to bring Dolby’s audio and video technologies to a broader range of media content and digital experiences. We are expanding our addressable market by offering solutions to companies building real-time digital experiences that increase audience engagement. For instance, our solution can provide the capability to stream high quality audiovisual content with ultra-low latency that reduces the delay between the action and the viewer.

Current wording

Highlights: Our strategy for Dolby OptiView is to bring Dolby’s audio and video technologies to a broader range of media content and digital experiences. We are expanding our addressable market by offering solutions to companies building real-time digital experiences that increase audience engagement. For instance, our solution can provide the capability to stream high quality audiovisual content with ultra-low latency that reduces the delay between the action and the viewer. In the second quarter of fiscal 2025, Hudl, a leader in sports technology, video and data analysis, and a long-standing customer of the Dolby OptiView Player, expanded their product usage to include Dolby OptiView Ads, our intelligent ad insertion platform. Hudl intends to use Dolby OptiView Ads across all its platforms.

Previous wording

Key Challenges: Dolby.io is an early-stage business, and it is uncertain when or if it will be a material revenue driver. Our success in this market will depend on adoption by companies building real-time digital experiences that increase audience engagement, the volume of usage of the services and our ability to monetize our services. In addition, the development and maintenance needed to provide a reliable and scalable platform may require us to incur additional costs to develop new skills within our existing employee base or hire external specialized talent. Although the market for real-time experiences has been growing, Dolby.io competes with other offerings.

Current wording

Key Challenges: Dolby OptiView is an early-stage business, and it is uncertain when or if it will be a material revenue driver. Our success in this market will depend on adoption by companies building real-time digital experiences that increase audience engagement, the volume of usage of the services and our ability to monetize our services. In addition, the development and maintenance needed to provide a reliable and scalable platform may require us to incur additional costs to develop new skills within our existing employee base or hire external specialized talent. Although the market for real-time experiences has been growing, Dolby OptiView competes with other offerings from third parties.

Previous wording

Services revenue consists of fees charged to support theatrical and television production for cinema exhibition, broadcast, and home entertainment, including equipment training and maintenance, mixing room alignment, equalization, as well as audio, color, and light image calibration. Services revenue also includes PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners and support for the implementation of our technologies into products manufactured by our licensees. Also included in services revenue are amounts generated through Dolby.io. Cost of services consists of personnel and personnel-related costs for providing our professional services, software maintenance and support, external contractors, and other direct expenses incurred on behalf of customers.

Current wording

Services revenue consists of fees charged to support theatrical and television production for cinema exhibition, broadcast, and home entertainment, including equipment training and maintenance, mixing room alignment, equalization, as well as audio, color, and light image calibration. Services revenue also includes PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners and support for the implementation of our technologies into products manufactured by our licensees. Also included in services revenue are amounts generated through Dolby OptiView. Cost of services consists of personnel and personnel-related costs for providing our professional services, software maintenance and support, external contractors, and other direct expenses incurred on behalf of customers.

Previous wording

S&M expenses consist primarily of employee compensation and benefits expenses, stock-based compensation, marketing and promotional expenses for events such as trade shows and conferences, marketing campaigns, travel-related expenses, contractor fees, facilities costs, depreciation and amortization, information technology expenses, and legal costs associated with the protection of our IP.

Current wording

S&M expenses consist primarily of employee compensation and benefits expenses, stock-based compensation, marketing and promotional expenses for events such as trade shows and conferences, marketing campaigns, travel-related expenses, contractor fees, facilities costs, depreciation and amortization, information technology expenses, and legal costs associated with unreported or underreported use of our IP.

Previous wording

Fiscal 2025 Restructuring Events. 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, on our highest strategic priorities. In connection with this plan, we recorded an expense in the first quarter of fiscal 2025 of $5.8 million in severance and other related benefits. The remaining components of this plan are expected to be completed by June 2025, resulting in an additional charge of approximately $5.0 million in severance and other termination benefits. Cash payment of the severance and other termination benefits are expected to be substantially completed by the end of the fourth quarter of fiscal 2025. These activities are expected to result in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2025. 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

Fiscal 2025 Restructuring Events. 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 expenses 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. The remaining components of this plan are expected to be completed by June 2025, resulting in an additional charge of approximately $1.1 million in severance and other termination benefits. Cash payment of the severance and other termination benefits are expected to be substantially completed by the end of the fourth quarter of fiscal 2025. These activities are expected to result in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2025. 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

Fiscal 2024 Restructuring Events. In April 2024, we initiated restructuring actions with the purpose of focusing our resources on our highest strategic priorities. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024.These activities resulted in gross pre-tax operating income savings of approximately $3 million in fiscal 2024 and are expected to result in savings of approximately $11 million within fiscal 2025. The impact of these estimated savings on our operating expenses have been and will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Current wording

Fiscal 2024 Restructuring Events. In April 2024, we initiated restructuring actions with the purpose of focusing our resources with our highest strategic priorities. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $3 million in fiscal 2024 and are expected to result in savings of approximately $11 million within fiscal 2025. The impact of these estimated savings on our operating expenses have been and will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Previous wording

Fiscal 2023 Restructuring Events. In September 2023, we initiated a restructuring plan with the purpose of focusing our resources on our highest strategic priorities. In continuation with this plan, we recorded an expense in the first quarter of fiscal 2024 of $7.4 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of the second quarter of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $40 million within fiscal 2024, which was consistent with our expectations. The impact of these savings on our operating expenses was offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Current wording

Fiscal 2023 Restructuring Events. In September 2023, we initiated a restructuring plan with the purpose of focusing our resources with our highest strategic priorities. In continuation with this plan, we recorded an expense in the first quarter of fiscal 2024 of $7.4 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of the second quarter of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $40 million within fiscal 2024, which was consistent with our expectations. The impact of these savings on our operating expenses was offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Previous wording

As of December 27, 2024, we had cash and cash equivalents of $520.8 million, which consisted of cash. In addition, we had long-term investments of $86.3 million, which primarily consisted an equity method investment and an equity security without a readily determinable value.

Current wording

As of March 28, 2025, we had cash and cash equivalents of $626.6 million, which consisted of cash and highly liquid money market funds. In addition, we had long-term investments of $73.8 million, which primarily consisted of an equity method investment.

Previous wording

During fiscal 2024, we acquired 100% of the issued and outstanding equity interests of GE Intellectual Property Licensing, LLC and GE Technology Development, Inc., which, collectively with each of their subsidiaries, comprised General Electric’s intellectual property licensing business that primarily targeted the consumer digital media and electronics sectors. Our cash and cash equivalents, short-term and long-term investments declined significantly as result of this acquisition, but we increased our cash and cash equivalent balances in the first quarter of fiscal 2025 through normal operations.

Current wording

During fiscal 2024, we acquired 100% of the issued and outstanding equity interests of GE Intellectual Property Licensing, LLC and GE Technology Development, Inc., which, collectively with each of their subsidiaries, comprised General Electric’s intellectual property licensing business that primarily targeted the consumer digital media and electronics sectors. Our cash and cash equivalents, short-term and long-term investments declined significantly as result of this acquisition, but we increased our cash and cash equivalent balances in fiscal 2025 through normal operations.

Previous wording

We have returned cash to stockholders through both repurchases of Class A common stock under our repurchase program initiated in fiscal 2010 and our quarterly dividend program initiated in fiscal 2015. Refer to Note 9 "Stockholders' Equity and Stock-Based Compensation" to our unaudited interim condensed consolidated financial statements for a summary of dividend payments made under the program during the first quarter of fiscal 2025 and additional information regarding our stock repurchase program.

Current wording

We have returned cash to stockholders through both repurchases of Class A common stock under our repurchase program initiated in fiscal 2010 and our quarterly dividend program initiated in fiscal 2015. Refer to Note 9 "Stockholders' Equity and Stock-Based Compensation" to our unaudited interim condensed consolidated financial statements for a summary of dividend payments made under the program during fiscal 2025 and additional information regarding our stock repurchase program.

Previous wording

Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. In the first quarter of fiscal 2025, a quarterly dividend of $0.33 per share was paid on our Class A and Class B common stock to eligible stockholders of record.

Current wording

Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. In the second quarter of fiscal 2025, a quarterly dividend of $0.33 per share was paid on our Class A and Class B common stock to eligible stockholders of record.

Previous wording

Net cash provided by operating activities increased $98.4 million in the fiscal quarter ended December 27, 2024 as compared to the fiscal quarter ended December 29, 2023, primarily due to the following:

Current wording

Net cash provided by operating activities increased $91.9 million in the fiscal year-to-date period ended March 28, 2025 as compared to the fiscal year-to-date period ended March 29, 2024, primarily due to the following:

Previous wording

Net cash provided by (used in) investing activities was $8.8 million lower in the fiscal quarter ended December 27, 2024 as compared to the fiscal quarter ended December 29, 2023, primarily due to the following:

Current wording

Net cash provided by (used in) investing activities was $35.0 million higher in the fiscal year-to-date period ended March 28, 2025 as compared to the fiscal year-to-date period ended March 29, 2024, primarily due to the following:

Previous wording

Net cash used in financing activities was $67.6 million lower in the fiscal quarter ended December 27, 2024 as compared to the fiscal quarter ended December 29, 2023, primarily due to the following:

Current wording

Net cash used in financing activities was $46.9 million lower in the fiscal year-to-date period ended March 28, 2025 as compared to the fiscal year-to-date period ended March 29, 2024, primarily due to the following:

Previous wording

In the first quarter of fiscal 2025, 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 second quarter of fiscal 2025, 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.