Dolby Laboratories, Inc DLB reported second-quarter fiscal 2025 results, with non-GAAP earnings per share (EPS) of $1.34, surpassing the Zacks Consensus Estimate by 3.9%. It reported $1.27 in the prior-year quarter.
Total revenues were $369.6 million, up from $364.5 million in the year-ago quarter but missed the Zacks Consensus Estimate by 2.4%. This uptick was driven by higher revenues in the Licensing segment.
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby remains focused on delivering the Dolby Atmos and Dolby Vision experience across all the ways consumers engage with content on their smartphones. User-generated content, particularly on social media and short-form video platforms, presents a significant opportunity to drive further Dolby Vision adoption in the mobile market.
Apple has long supported Dolby Vision and Dolby Vision Capture across its iPhone lineup, and DLB continue to make steady progress in expanding support within the Android ecosystem. In China, where Dolby Vision is already widely adopted across social media and video-sharing platforms, the company added two new partners this quarter.
The company declared a cash dividend of 33 cents per share, payable May 21, 2025, to its shareholders of record on May 13.
Following the announcement, shares fell 4.2% in the pre-market trading session today. In the past year, shares have lost 7.2% against the Zacks Audio Video Production industry’s growth of 43.1%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
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DLB’s Segmental Performance
Revenues from Licensing were $346 million, up 2.3% year over year.
Products and Services’ revenues were down 10.4% year over year to $23.6 million.
Our estimates were pegged at $350.7 million and $27.8 million for the Licensing and Products and Services revenues, respectively.
Broadcast Licensing contributed 27% to total licensing revenues in the quarter under review. Mobile Licensing, Consumer Electronics, PC Licensing and Licensing from Other Markets accounted for 29%, 11%, 17% and 16% of licensing revenues, respectively.
For fiscal 2025, management continues to expect Consumer Electronics to be down mid-single digits, while it expects strong growth in mobile and other markets. Broadcast and PC are expected to witness flattish sales.
Other Details of DLB
Gross profit in the fiscal second quarter was $333.7 million compared with $325.8 million in the year-ago quarter. Total operating expenses increased to $226 million from $216.8 million reported in the year-ago quarter.
Operating income was $107.8 million compared with $109 million in the year-ago quarter.
DLB’s Cash Flow & Liquidity
For the fiscal year to date that ended on March 28, 2025, Dolby generated $281.7 million of net cash from operating activities.
As of March 28, 2025, the company had $626.6 million in cash and cash equivalents, with $646 million in total liabilities. It had $520.8 million in cash and cash equivalents, with $641.6 million in total liabilities, as of Dec. 27, 2024.
The company repurchased 429,000 shares of its common shares for about $35 million during the quarter and ended the period with $352 million left under its stock repurchase authorization.
DLB’s 2025 Outlook
For the third quarter of fiscal 2025, the company estimates revenues between $290 million and $320 million. It expects GAAP EPS of 26-41 cents and non-GAAP EPS between 62 cents and 77 cents.
The company anticipates third-quarter licensing revenues to be between $265 million and $295 million.
On a GAAP basis, operating expenses are expected to be in the range of $225-$235 million, whereas, on a non-GAAP basis, the same is anticipated to be between $190 million and $200 million.
For fiscal 2025, the company expects revenues to be in the $1.31-$1.38 billion band, down from the previous guidance of $1.33-$1.39 billion. GAAP operating margin is still expected to be 20%, while the non-GAAP operating margin is projected to be nearly 33%. Licensing revenues are forecasted to be in the range of $1.21 billion to $1.28 billion from $1.22 billion to $1.28 billion predicted earlier.
On a GAAP basis, operating expenses are expected to be between $905 million and $920 million compared with $915-$925 million projected earlier, whereas, on a non-GAAP basis, it is anticipated to be in the range of $760-$775 million compared with $765-$775 million projected earlier. The company expects GAAP EPS of $2.31-$2.46, changed from $2.39-$2.54 and non-GAAP EPS of $3.88-$4.03, revised from $3.99-$4.14. Recent Updates
Dolby continued to expand its presence across a wide range of consumer experiences in recent months. Major sporting events like the Super Bowl and March Madness were made available in both Dolby Atmos and Dolby Vision, enhancing the viewing experience for fans. In the U.K., Sky launched the Sky Glass Gen 2 TV, featuring built-in support for Dolby Vision and a Dolby Atmos-enabled soundbar. LG introduced its latest evo C5 and G5 TVs, both equipped with Dolby Atmos and Dolby Vision capabilities.
In Germany, IPTV/OTT market leader Waipu.tv announced support for both Dolby technologies, while in the Middle East and North Africa, TOD—a prominent streaming platform for sports and entertainment—launched a 4K set-top box with Dolby Atmos and Dolby Vision support. OPPO expanded its smartphone lineup with the Find X8 Ultra, Find X8s and Find X8s+, all offering Dolby Vision capture and playback features.
In the audio space, Sonos, Vizio and Teufel released new soundbars that support Dolby Atmos. Meanwhile, the automotive sector saw growing adoption, with Porsche announcing Dolby Atmos support across its 2026 Taycan, Panamera, Cayenne and 911 models. Cadillac also revealed that its entire 2026 EV lineup will feature Dolby Atmos and new vehicle models from Volvo, Xiaomi and Hyundai will support Dolby’s technologies as well.
Additionally, Dolby Laboratories and AMC Entertainment announced an expansion of their partnership, which will add 40 new Dolby Cinema screens at select U.S. locations by 2027.
DLB’s Zacks Rank
Dolby currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Skechers U.S.A., Inc. SKX reported first-quarter 2025 results, wherein the top line missed the Zacks Consensus Estimate but the bottom line surpassed the same. Skechers reported earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $1.17. Also, the bottom line increased 0.8% from the year-earlier quarter. SKX generated sales of $2.41 billion, which missed the consensus estimate of $2.44 billion. However, the top line grew 7.1% year over year.
In the past year, shares of SKX have declined 28.8%.
SAP SE SAP reported first-quarter 2025 non-IFRS EPS of €1.44 ($1.51), which increased 79% from the year-ago quarter. The Zacks Consensus Estimate was pegged at $1.39. Driven by momentum in the cloud business, SAP reported total revenues on a non-IFRS basis of €9.01 billion ($9.48 billion), which increased 12.1% year over year (up 11% at constant currency or cc). The Zacks Consensus estimate was pegged at $9.78 billion.
In the past year, shares of SAP have soared 57.5%.
Simulations Plus, Inc. SLP second-quarter fiscal 2025 adjusted earnings of 31 cents per share, which fell 3% year over year. However, the figure surpassed the Zacks Consensus Estimate of 25 cents per share. Quarterly revenues jumped 23% year over year to $22.4 million, driven by increasing momentum across its software and services business segments. The growing uptake of its flagship solutions, including GastroPlus, MonolixSuite and ADMET Predictor, fueled the top-line expansion.
In the past six months, shares of SLP have surged 22.1%.
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