Dolby Laboratories (DLB) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $347 million, down 3% year-over-year, with non-GAAP earnings exceeding guidance due to early deal closures and a $7 million favorable true-up for Q4 shipments.

• Net income attributable to the company was $53 million ($0.55 per diluted share), a 21% decrease from the prior year quarter.

• Non-GAAP net income was $103 million ($1.06 per diluted share), down from $111 million ($1.14) year-over-year.

• Growth initiatives in automotive, TV, mobile, and imaging patents are progressing, with new partnerships and expanded adoption, including over 35 automotive OEMs.

• A $25 million sale of HEVC/VVC program intangible assets to Access Advance unified video patent pool administration.

Financial highlights

• Q1 2026 licensing revenue was $319.8 million, with product and services revenue at $27 million.

• Gross profit for Q1 2026 was $303.5 million; GAAP gross margin was 87.5%.

• Operating income was $62.2 million, down from $79.9 million year-over-year.

• Operating cash flow was $55 million; $70 million of stock repurchased, with $207 million remaining on authorization.

• Dividend declared at $0.36 per share, up 9% year-over-year; $730 million in cash and investments at quarter end.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $1.4–$1.45 billion; licensing revenue expected at $1.295–$1.345 billion.

• Non-GAAP EPS for the year projected at $4.30–$4.45; GAAP EPS guidance: $2.71–$2.86.

• Q2 2026 revenue expected at $375–$405 million, with licensing revenue of $350–$380 million.

• Gross margin projected at 91% (non-GAAP) for Q2; non-GAAP EPS expected between $1.29 and $1.44.

• Restructuring actions expected to yield $20 million in gross pre-tax operating income savings in fiscal 2026, mostly offset by increased investment and inflation.