Dolby Laboratories (DLB) The 44th Annual William Blair Growth Stock Conference summary

Business overview and innovation

• Focuses on delivering high-quality audio and visual experiences through science and engineering, building ecosystems with content creators, distributors, and device manufacturers.

• Dolby Atmos and Dolby Vision are flagship technologies, enhancing creative storytelling and user experience across devices and cinemas.

• Revenue is primarily generated from licensing, with over 90% coming from device and cinema integration, supported by a durable ecosystem model.

• Licensing business operates at approximately 98% gross margin, reflecting high profitability.

• Company has navigated multiple industry transitions, such as analog to digital and physical media to streaming, by focusing on innovation and ecosystem strength.

Revenue streams and macro environment

• Foundational audio technologies, including branded codecs and patents, account for about two-thirds of revenue and are highly dependent on consumer device shipments.

• The remaining one-third, driven by Dolby Atmos and Vision, is targeted for 15%-25% CAGR over the next 3-5 years, with high single-digit growth guided for the current year.

• Foundational segment is currently flat due to macroeconomic headwinds, but expected to return to low single-digit growth as conditions improve.

• Growth in Atmos and Vision is supported by increasing adoption in TVs, sports broadcasting, music, and automotive sectors.

Growth drivers and market expansion

• Dolby Atmos and Vision are present in about 25% of 4K TVs, with higher penetration in premium models and growing adoption in mid- and low-end segments.

• Sports and live events, such as the Olympics and major soccer championships, are key drivers for TV sales and technology adoption.

• Dolby Atmos Music has seen rapid adoption, with over 90% of top Billboard artists producing in the format and major streaming platforms supporting it.

• Automotive is a fast-growing market, with 15 OEMs, including leading Chinese EV makers and global brands, integrating Dolby Atmos.