Dolby Laboratories (NYSE:DLB) Posts Quarterly Earnings Results, Beats Expectations By $0.02 EPS

Key Points

• Dolby Laboratories reported quarterly EPS of $0.69, beating expectations by $0.02, but revenue of $305 million fell short of the $311.96 million consensus and declined 3.3% year over year.
• Management expects strong fourth-quarter growth, with revenue projected at $362 million–$392 million, supported by a Meta video-distribution deal, expanding Dolby Atmos adoption in autos and wearables, and favorable licensing timing.
• Fiscal 2026 guidance calls for $1.41 billion–$1.44 billion in revenue and $4.25–$4.40 in non-GAAP EPS; Dolby also authorized an additional $350 million in share repurchases, while warning that elevated memory costs could pressure mobile and PC demand.

Dolby Laboratories (NYSE:DLB - Get Free Report) issued its earnings results on Thursday. The electronics maker reported $0.69 EPS for the quarter, beating the consensus estimate of $0.67 by $0.02, FiscalAI reports. Dolby Laboratories had a net margin of 17.85% and a return on equity of 11.47%. The company had revenue of $305.00 million for the quarter, compared to the consensus estimate of $311.96 million. During the same quarter in the previous year, the company earned $0.78 EPS. The firm's revenue for the quarter was down 3.3% compared to the same quarter last year. Dolby Laboratories updated its FY 2026 guidance to 4.250-4.400 EPS and its Q4 2026 guidance to 1.130-1.280 EPS.

Here are the key takeaways from Dolby Laboratories' conference call:

• Q4 revenue is expected to grow 23% year over year at the midpoint, reaching $362 million–$392 million, driven by a large Meta video-distribution deal, increased Dolby Atmos adoption in autos, wearables, and favorable minimum-volume-commitment timing.
• Dolby’s Video Distribution Program gained major licensees Meta and Alibaba, bringing the pool to 45 licensors and strengthening management’s confidence in reaching its goal of generating 10% of revenue from content partners by fiscal 2028.
• Automotive adoption continues to expand, with more than 40 OEM agreements and new launches from Volkswagen, Buick, and Google’s Android Auto partners; management said auto is Dolby’s fastest-growing end market and may be reported separately once it reaches 10% of licensing revenue.
• Fiscal 2026 revenue guidance was narrowed to $1.41 billion–$1.44 billion, while non-GAAP EPS is expected at $4.25–$4.40; the company is targeting approximately 100 basis points of operating-margin improvement and authorized an additional $350 million for share repurchases.
• Management is monitoring elevated memory costs, which could pressure mobile and PC unit shipments and product launches, although the company expects growth in video distribution, automotive, and wearables to offset part of the impact.

Dolby Laboratories Price Performance

Shares of DLB stock traded down $0.85 during trading hours on Thursday, reaching $51.69. 1,149,996 shares of the company were exchanged, compared to its average volume of 876,448. Dolby Laboratories has a fifty-two week low of $48.26 and a fifty-two week high of $75.80. The stock's fifty day moving average is $52.25 and its two-hundred day moving average is $58.67. The company has a market cap of $4.89 billion, a price-to-earnings ratio of 16.89 and a beta of 0.81.

Insider Activity at Dolby Laboratories

In other news, CFO Robert J. Park sold 4,895 shares of Dolby Laboratories stock in a transaction on Tuesday, May 12th. The stock was sold at an average price of $56.68, for a total value of $277,448.60. Following the completion of the sale, the chief financial officer directly owned 81,490 shares of the company's stock, valued at approximately $4,618,853.20. This trade represents a 5.67% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CMO Todd Pendleton sold 11,876 shares of the business's stock in a transaction on Friday, May 22nd. The stock was sold at an average price of $54.55, for a total value of $647,835.80. Following the sale, the chief marketing officer owned 41,480 shares of the company's stock, valued at approximately $2,262,734. The trade was a 22.26% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 47,458 shares of company stock worth $2,639,537. 37.93% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the business. AQR Capital Management LLC grew its stake in shares of Dolby Laboratories by 51.8% during the second quarter. AQR Capital Management LLC now owns 1,736,260 shares of the electronics maker's stock worth $128,935,000 after purchasing an additional 592,282 shares during the period. Alyeska Investment Group L.P. bought a new position in Dolby Laboratories in the fourth quarter valued at approximately $23,477,000. First Trust Advisors LP increased its position in shares of Dolby Laboratories by 23.8% during the fourth quarter. First Trust Advisors LP now owns 1,880,528 shares of the electronics maker's stock worth $120,768,000 after acquiring an additional 361,871 shares in the last quarter. Voloridge Investment Management LLC boosted its stake in Dolby Laboratories by 2,017.9% in the 4th quarter. Voloridge Investment Management LLC now owns 325,499 shares of the electronics maker's stock worth $20,904,000 after purchasing an additional 310,130 shares during the period. Finally, Snyder Capital Management L P grew its holdings in shares of Dolby Laboratories by 24.4% during the fourth quarter. Snyder Capital Management L P now owns 1,427,093 shares of the electronics maker's stock worth $91,648,000 after buying an additional 279,743 shares in the last quarter. 58.56% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of equities analysts have commented on DLB shares. Barrington Research restated an "outperform" rating and issued a $90.00 price target on shares of Dolby Laboratories in a research report on Monday, June 15th. Wall Street Zen raised shares of Dolby Laboratories from a "hold" rating to a "buy" rating in a report on Saturday, May 30th. Rosenblatt Securities reissued a "buy" rating and issued a $85.00 target price on shares of Dolby Laboratories in a report on Thursday, June 11th. Finally, Weiss Ratings restated a "hold (c-)" rating on shares of Dolby Laboratories in a research report on Wednesday, June 24th. Three research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $90.75.

Dolby Laboratories Company Profile

Dolby Laboratories, Inc is a global leader in audio and imaging technologies, specializing in the development, licensing and deployment of solutions that enhance entertainment and communications experiences. The company's core business revolves around creating advanced audio codecs, noise reduction systems and spatial sound technologies for a wide range of applications, including cinema, broadcast, gaming, streaming and personal devices. Dolby's licensing model enables consumer electronics manufacturers, content creators and service providers to integrate its technologies into products such as televisions, smartphones, home theater systems and set-top boxes.

Among its flagship innovations are Dolby Atmos, an immersive audio format that delivers three-dimensional soundscapes for theaters and home systems; Dolby Digital and Dolby Digital Plus, widely adopted audio compression formats for broadcast and streaming; and Dolby Vision, a high-dynamic-range imaging technology that expands color, contrast and brightness in displays.

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