Dolby Laboratories, Inc. (NYSE:DLB) Q3 2024 Results Conference Call August 7, 2024 5:00 PM ET

Company Participants

Peter Goldmacher - VP, IR
Kevin Yeaman - CEO
Robert Park - CFO

Conference Call Participants

Ralph Schackart - William Blair
Jim Goss - Barrington Research

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing Fiscal Third Quarter Results. During the presentation, all participants will be in a listen only mode [Operator Instructions]. As a reminder, this call is being recorded, Wednesday, August 7, 2024. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.

Peter Goldmacher

Thank you, operator. And good afternoon, everyone. Welcome to Dolby Laboratories third quarter 2024 earnings conference call. Joining me today are Kevin Yeaman, Dolby Laboratories CEO; and Robert Park, our CFO. As a reminder, today's discussion will include forward-looking statements, including our fiscal 2024 fourth quarter and full year outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including, among other things, the impact of macroeconomic events, supply chain issues, inflation rates, changes in consumer spending and geopolitical instability on our business. A discussion of these risks and additional risks and uncertainties can be found in the earnings press release that we issued today under the section captioned forward-looking statements as well as in the Risk Factors section of our most recent quarterly report on Form 10-Q. Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events. During today's call, we will discuss non-GAAP financial measures. A reconciliation between GAAP to non-GAAP financial measures is available in our earnings press release and in the Interactive Analyst Center on the Investor Relations section of our Web site. With that, I'd like to turn the call over to Kevin.

A - Kevin Yeaman

Thank you, Peter. And thanks to everyone joining us on the call today. Revenue for the quarter came in just above the midpoint of the range that we provided you on the last earnings call and earnings were above the high end of the range. For the full year, we now expect revenue to be down approximately 1% to 2%, which is at the lower end of what we've been expecting throughout the year. We are not making any changes to our non-GAAP EPS guidance for the year. Our foundational audio revenue is coming in lower than we expected as global device sales in aggregate have been soft all year and we are seeing lower than expected units in set-top boxes and gaming consoles for the second half of the year. In products and services, cinema products are coming in lower than we expected as the box office remains sluggish and exhibitors continue to push out CapEx. Dolby Atmos and Dolby Vision are performing slightly ahead of our expectations as strong content growth continues to drive device attach rates. Dynamics remain stable and ongoing engagement from the broader ecosystem of creators, distributors and device manufacturers are driving a steady stream of product launches across all device families. We continue to be confident in our growth opportunity with Dolby Atmos and Dolby Vision and we have a strong position with our foundational audio technologies, which are well positioned as our end markets return to more normal cycles.