Dolby Laboratories NYSE: DLB reported fiscal second-quarter 2026 results that management said were consistent with prior expectations, while highlighting continued traction for Dolby Vision and Dolby Atmos across streaming platforms, devices, and automotive. The company also maintained its full-year outlook.
Quarterly results and cash returns
Revenue for the quarter was $396 million, which CFO Robert Park said was within the guidance provided last quarter. On a non-GAAP basis, earnings were $1.37 per share, also within the guided range.
Park said licensing revenue totaled $372 million, while products and services revenue was $23 million. The company generated approximately $93 million in operating cash flow during the quarter and repurchased $65 million of common stock. Park said Dolby ended the quarter with about $675 million in cash and investments and had approximately $142 million remaining under its share repurchase authorization.
Dolby declared a $0.36 dividend, which Park said was up 9% from a year earlier. He added that GAAP operating expenses included a $2 million restructuring charge tied to actions initiated last year.
Content and platform momentum for Dolby Vision and Dolby Atmos
CEO Kevin Yeaman emphasized Dolby’s position across “the creator content platform device ecosystem,” describing progress in bringing more Dolby content to more platforms.
In social media, Yeaman said “top-tier” companies are increasingly recognizing the value of Dolby Vision streaming. He noted that Meta has adopted Dolby Vision for content streamed on iOS for both Instagram and Facebook, and that Douyin in China has enabled Dolby Vision on both iOS and Android.
Yeaman also pointed to continued activity in music and sports. In music, he said over 90% of artists on Billboard’s year-end top 100 list over the last three years are creating in Dolby Atmos, and that Dolby Atmos was “well-represented” at the Grammys, including all Best New Artist nominees.
On sports and live events, Yeaman said the Super Bowl and the Winter Olympics were available in Dolby Vision and Dolby Atmos during the quarter. He also cited the ICC Men’s T20 World Cup in India and the 2026 Formula One season streaming on Apple as available in Dolby Vision. He said HBO Max is streaming a “wide variety” of sports content in Dolby Atmos and Dolby Vision and also streams NASA’s Artemis II mission in Dolby Vision, while Peacock is streaming sports in Dolby Atmos and plans to begin streaming in Dolby Vision.
Device expansion: TV, mobile, and automotive
Yeaman said Dolby continues to expand “further into mass market TV.” He pointed to Amazon adding Dolby Vision support to its ad-supported tier and said TV Azteca announced it will bring Dolby Atmos to free-to-air broadcast in Mexico.
On TV hardware, Yeaman said Dolby expects the first Dolby Vision 2 TVs to reach the market by the end of the fiscal year. He said Hisense, TCL, and Philips have announced plans to release a range of Dolby Vision 2-enabled TVs globally, with Peacock and Canal+ committed to delivering content. Yeaman said Dolby expects Dolby Vision 2 to increase average selling prices and drive “deeper adoption into TV lineups.”
In mobile, Yeaman described the combination of social media and music momentum as strengthening Dolby’s value proposition across devices. He said Dolby Vision capture and playback and Dolby Atmos are included across Apple’s lineup, including its latest iPhone introduced during the quarter. Yeaman also cited announcements from Xiaomi (Redmi Note 15 Pro series with Dolby Vision, Dolby Vision Capture, and Dolby Atmos) and Vivo (X300 Ultra with Dolby Vision, and iQOO 15 Ultra including Dolby Atmos and Dolby Vision).
Yeaman added that Dolby continues to perform well in high-end phones and said the company is “excited” that Dalian is now fully supporting Dolby Vision on Android, which he said should help Dolby expand further into mid-range Android phones.
Automotive was a major focus of the call. Yeaman called it “another big quarter for automotive,” citing a series of recent announcements:
- BMW announced Dolby Atmos support in the 7 Series globally and the iX3 in China (shared at the Beijing Auto Show).
- BYD launched its Denza line with Dolby Atmos in Europe, which Yeaman described as BYD’s first Dolby Atmos car in the European market (shared at the Paris Motor Show).
- Lexus announced its first Dolby Atmos-enabled cars.
- NIO expanded Dolby Atmos adoption to the Firefly compact EV sub-brand for Singapore and Thailand.
During Q&A, Yeaman also said that in China, the Hyundai IONIQ was launched with Dolby Atmos, describing it as a significant example because it is a 4-channel, 8-speaker implementation that reflects a more mass-market hardware footprint. Yeaman said the company had demoed a four-channel implementation at CES to show the difference Dolby could make at the mass-market level.
Newer revenue streams: Video Distribution Program and Dolby OptiView
Yeaman and Park highlighted growing opportunities beyond traditional device licensing. Yeaman said Dolby is “beginning to generate revenue from content platforms” as they compete on experience.
Yeaman discussed the company’s Video Distribution Program, described on the call as a patent pool licensing imaging patents to content streamers. He said the pool added Sharp and SK Planet this quarter, bringing the total to 40 licensors. Yeaman said these additions bring “important patents and validation” and noted that the licensee pipeline is strong. In Q&A, he added Dolby announced the pool at the beginning of the year, has brought on 40 licensors, and has signed “half a dozen licensees,” with expectations to grow through the year.
Yeaman also discussed Dolby OptiView and the company’s focus on live sports experiences that can be tailored to each viewer. He said at the NAB show, Dolby previewed its “sports intelligence platform,” which he said uses AI to analyze viewer preferences and match them to live action, as well as to generate highlights and reformat content for different screen sizes. Yeaman said Dolby OptiView capabilities depend on low delay and synchronization for users.
Yeaman said Dolby added Genius Sports as a win this quarter and noted William Hill is using Dolby OptiView in the U.K. to deliver horse racing with consistent, low-latency content.
Guidance maintained; end markets and macro factors
Park said Dolby is maintaining its full-year guidance. The company expects fiscal 2026 total revenue of $1.4 billion to $1.45 billion, including licensing revenue of $1.295 billion to $1.345 billion. Non-GAAP operating expenses are targeted at $780 million to $800 million, which Park said implies 50 to 100 basis points of non-GAAP operating margin improvement. Dolby continues to expect non-GAAP EPS of $4.30 to $4.45.
Park said Dolby Atmos, Dolby Vision, and imaging patents are expected to grow roughly 15% for the full year and comprise nearly half of licensing revenue, while foundational revenue is expected to be “down slightly.” He also said end-market growth rates for the year were expected to be similar to the prior quarter’s view, with “other” growth driven primarily by Dolby Atmos adoption in auto, the Video Distribution Program, and Dolby Cinema, partially offset by lower gaming. Park said mobile and broadcast growth is driven by adoption of Dolby Atmos and Dolby Vision, growth in imaging patent programs, and higher recoveries, while consumer electronics is expected to be roughly flat and PC to decline due to lower unit sales.
For the fiscal third quarter, Park guided revenue to $295 million to $325 million, including licensing revenue of $270 million to $300 million. He said non-GAAP gross margin is expected to be approximately 88%, with non-GAAP operating expenses of $200 million to $210 million and non-GAAP EPS of $0.56 to $0.71.
On end-market performance in the second quarter, Park said broadcast was up 26% year-over-year due to a previously discussed large recovery, while mobile was down 6% due to the timing of deals. He said the company still expects both broadcast and mobile to be up mid-single digits for the full year.
In Q&A, Yeaman addressed memory pricing and other macro considerations, saying Dolby is monitoring factors including memory pricing, oil price volatility, supply chain and consumer sentiment. He said memory pricing impacts are most notable in mobile and PC, and less so in TV. Yeaman said Dolby has not seen a “significant impact” to its business to date and that the company updates guidance based on customer and industry inputs. He added that Dolby’s diversified end markets can help offset minor adjustments in some areas.
About Dolby Laboratories NYSE: DLB
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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