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Dolby (DLB) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q2 FY26)· Information Technology· Apr 30, 2026

Source: earnings call transcript

Executive summary

Dolby Q2 FY26 — Strong Content Adoption and Maintained Full-Year Guidance

Dolby Laboratories delivered Q2 FY26 results in line with expectations, driven by strong adoption of Dolby Atmos and Dolby Vision across content platforms, automotive, and mobile devices. The company maintained its full-year guidance, anticipating continued growth in its core technologies and emerging revenue streams like the video distribution program and Dolby OptiView, despite some end-market specific headwinds.

Highlights

5

  • Revenue and non-GAAP EPS for Q2 FY26 came in consistent with guidance.

  • Broadcast revenue was up 26% year-over-year due to a large recovery.

  • A dividend of $0.36 per share was declared, representing a 9% increase from a year ago.

  • Approximately $93 million in operating cash flow was generated during the quarter.

  • Dolby Atmos, Dolby Vision, and imaging patents are expected to grow roughly 15% for the full year, comprising nearly half of licensing revenue.

Concerns

3

  • Mobile revenue was down 6% year-over-year in Q2 FY26 due to timing of deals.

  • Foundational revenue is expected to be down slightly for the full fiscal year.

  • The PC end market is expected to decline for the full year primarily due to lower unit sales.

Guidance & targets

CategoryTargetConfidence
Total revenue
$1.4B to $1.45B
high materiality
High
Licensing revenue
$1.295B to $1.345B
high materiality
High
Non-GAAP operating expenses
$780M and $800M
medium materiality
High
Non-GAAP operating margin improvement
50 and 100 basis points
medium materiality
High
Non-GAAP earnings per share
$4.30 and $4.45
high materiality
High
Dolby Atmos, Dolby Vision and imaging patents growth
roughly 15%
high materiality
High
Foundational revenue growth
down slightly
medium materiality
High
Mobile and Broadcast end market growth
mid-single digits
medium materiality
High
CE end market growth
roughly flat
medium materiality
High
PC end market growth
declines
medium materiality
High
Total revenue
$295M and $325M
high materiality
High
Licensing revenue
$270M and $300M
high materiality
High
Non-GAAP gross margins
approximately 88%
medium materiality
High
Non-GAAP operating expenses
$200M and $210M
medium materiality
High
Non-GAAP earnings per share
$0.56 and $0.71
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Broadcast
Revenue was up year-over-year due to a large recovery mentioned on the last call. Expected to be up mid-single digits for the full year.
—26%——
Mobile
Revenue was down year-over-year due to timing of deals. Expected to be up mid-single digits for the full year.
—-6%——
CE
Expected to be roughly flat for the full year.
—roughly flat——
PC
Expected to decline for the full year primarily due to lower unit sales.
—declines——

Product announcements

ProductTypeDetails
Dolby Vision 2 TVslaunch
Dolby OptiView Sports Intelligence Platformroadmap

Deals & partnerships

Meta Adoption of Dolby Vision for social media content streaming

Meta has adopted Dolby Vision for content streamed on iOS for both Instagram and Facebook.

Douyin Enabled Dolby Vision for social media content streaming

Douyin in China has enabled Dolby Vision for content on both iOS and Android.

Amazon Added support for Dolby Vision to its ad-supported tier

Amazon recently announced that it has added support for Dolby Vision to its ad-supported tier.

TV Azteca Bringing Dolby Atmos to free-to-air broadcast

TV Azteca, the second largest mass media company in Mexico, announced that it will bring Dolby Atmos to free-to-air broadcast.

BMW Dolby Atmos support in automotive

BMW announced Dolby Atmos support in the 7 Series globally and the iX3 in China at the Beijing Auto Show.

BYD (Denza line) Dolby Atmos adoption in automotive for European market

BYD launched its Denza line with Dolby Atmos at the Paris Auto Show, its first car with Dolby Atmos in the European market.

Lexus First Dolby Atmos-enabled cars

Lexus announced their first Dolby Atmos-enabled cars this quarter.

NIO Expanded Dolby Atmos adoption to sub-brand

NIO expanded its Dolby Atmos adoption to the Firefly, a compact EV sub-brand for Singapore and Thailand.

Hisense, TCL, Philips Plans to release Dolby Vision 2-enabled TVs

Hisense, TCL and Philips have announced plans to release a wide range of Dolby Vision 2-enabled TVs globally.

Sharp Joined video distribution program as licensor

Sharp joined the video distribution program, bringing the total licensors to 40.

SK Planet Joined video distribution program as licensor

SK Planet joined the video distribution program, bringing the total licensors to 40.

Genius Sports Win for Dolby OptiView

Genius Sports, a leading data technology and broadcast partner, is a new win for Dolby OptiView.

William Hill Using Dolby OptiView for horse racing content

In the U.K., William Hill is now using Dolby OptiView to deliver horse racing, providing consistent low-latency content.

Hyundai IONIQ Launched with Dolby Atmos (4-channel, 8-speaker implementation)

In China, the Hyundai IONIQ was launched with Dolby Atmos, featuring a 4-channel, 8-speaker implementation suitable for mass market cars.

Risks & headwinds

Macroeconomic factors (memory pricing, oil prices, supply chain, consumer sentiment) ongoing

discussed, not quantified

Mitigation:Diverse end markets and revenue streams; good visibility from minimum volume commitments; no significant impact to business to date.

Mobile revenue decline Q2 FY26

-6% YoY

Mitigation:Due to timing of deals; still expected to be up mid-single digits for the full year.

PC end market decline FY26

declines

Mitigation:Primarily due to lower unit sales; offset by strength in other areas.

Foundational revenue decline FY26

down slightly

Mitigation:Offset by growth in other areas.

What to watch in Q3 FY26

Mobile end market growth

Next quarter (Q3 FY26 results)
Current down 6% YoY in Q2 FY26
Target mid-single-digit growth for full year FY26

Why it matters

Mobile is a key end market, and its recovery from Q2's decline is important for overall licensing revenue growth.

Mobile was down 6% year-over-year due to timing of deals. We still expect both broadcast and mobile to be up mid-single digits for the full year.

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Q&A highlights

What is the expected ramp shape for consumption-based revenue streams (Dolby OptiView, VDP) to reach 10% of revenue in 3 years?

Kevin Yeaman expressed satisfaction with the progress of Dolby OptiView and the video distribution program. He detailed Dolby OptiView's focus on personalized live sports experiences using AI, mentioning customer wins like Genius Sports and NFL. For the Video Distribution Program, he noted 40 licensors and half a dozen licensees, expecting continued growth throughout the year. He did not explicitly state the ramp shape but emphasized the early stages and engagement.

“We've got a growing roster of customers, NFL, NASCAR, sports information, solutions or services rather. And this quarter, we're excited to add Genius Sports.”

asked by John Rigatti · answered by Kevin Yeaman

2 min read 5 chapters

Detailed narrative

Content Platform Expansion

Dolby continues to strengthen its position across the entertainment ecosystem, with significant progress in bringing Dolby content to more platforms. Meta has adopted Dolby Vision for Instagram and Facebook on iOS, and Douyin in China has enabled Dolby Vision for both iOS and Android. The Super Bowl, Winter Olympics, T20 Cricket World Cup, and Formula 1 season are increasingly available in Dolby Vision and Dolby Atmos, driving adoption in new TV sales. Amazon also added Dolby Vision support to its ad-supported tier, and TV Azteca will bring Dolby Atmos to free-to-air broadcast in Mexico.

Automotive Sector Momentum

The automotive industry is a key growth driver, with a broader shift towards high-quality in-car entertainment. BMW announced Dolby Atmos support in its 7 Series globally and iX3 in China. BYD launched its Denza line with Dolby Atmos in the European market, marking its first such car outside China. Lexus introduced its first Dolby Atmos-enabled cars, and NIO expanded adoption to its Firefly sub-brand. Notably, the Hyundai IONIQ launched with a 4-channel, 8-speaker Dolby Atmos implementation in China, signaling potential for mass-market penetration.

Mobile Device Integration and Reach

Progress in music and social media platforms is enhancing Dolby's value proposition in mobile. Dolby Vision capture and playback, along with Dolby Atmos, are included across Apple's latest iPhone lineup. Xiaomi and Vivo also released flagship devices with Dolby Vision and Atmos. Douyin's full support for Dolby Vision on Android is expected to help drive further adoption into mid-range Android phones, expanding Dolby's reach beyond high-end devices.

New Revenue Streams: VDP and OptiView

Dolby is beginning to generate revenue from content platforms through new initiatives. The video distribution program, a patent pool for imaging patents, has expanded to 40 licensors, including Sharp and SK Planet, and has a strong licensee pipeline. Dolby OptiView, which focuses on real-time personalized sports experiences, secured new wins with Genius Sports and William Hill, reinforcing its position in the sports ecosystem and demonstrating its potential for fan engagement and low-latency content delivery.

Macroeconomic Factors and Guidance Stability

Management is closely monitoring macroeconomic factors such as memory pricing, oil prices, supply chain issues, and consumer sentiment. While mobile and PC end markets are most exposed to memory pricing dynamics, the company has not seen a significant impact to its business to date. Dolby's diverse set of end markets and revenue streams, combined with good visibility from minimum volume commitments, support the decision to maintain full-year guidance despite minor adjustments in some areas.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.