Dolby Laboratories Reports Third Quarter 2025 Financial Results

SAN FRANCISCO, July 31, 2025 — Dolby Laboratories, Inc. (NYSE:DLB) today announced the company’s financial results for the third quarter of fiscal 2025.

“We had solid results in Q3 and we continue to see strong engagement with creators, distributors and device manufacturers,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “The number of experiences in Dolby Atmos and Dolby Vision continues to grow across music, sports, podcasts, user-generated content, movies and TV in mobile devices, TVs, PCs, cars and soundbars.”

Third Quarter Fiscal 2025 Financial Highlights

 

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Total revenue was $316 million, compared to $289 million for the third quarter of fiscal 2024.

 

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GAAP net income was $46 million or $0.48 per diluted share, compared to GAAP net income of $38 million or $0.40 per diluted share for the third quarter of fiscal 2024. On a non-GAAP basis, third quarter net income was $76 million or $0.78 per diluted share, compared to $69 million or $0.71 per diluted share for the third quarter of fiscal 2024.

 

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Dolby repurchased approximately 526,000 shares of its common stock for approximately $40 million, and ended the quarter with approximately $312 million of stock repurchase authorization available going forward.

A complete listing of Dolby’s non-GAAP measures are described and reconciled to the corresponding GAAP measures at the end of this release.

Recent Business Highlights

 

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The FIFA Club World Cup, Stanley Cup Finals, French Open, and Indian Premier League playoffs and finals were all broadcast in Dolby.

 

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Audi announced that it will be supporting Dolby Atmos in its Q7, Q8, A8, and E Tron GT vehicle models.

 

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In India, Tata launched the Harrier EV and Mahindra launched the Thar ROXX AX7L SUV, both of which support Dolby Atmos.

 

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Motorola launched its first smartphone featuring Dolby Vision Capture, and the Xiaomi 15S Pro and Xiaomi Civi 5 Pro launched with Dolby Vision and Dolby Atmos.

 

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New TVs and speakers featuring Dolby technology were launched by Samsung, Haier, TCL, LG, Marshall, and JBL.

 

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We partnered with Lenovo and Google to launch the first Chromebook to support Dolby Atmos.

 

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HBO Max, which streams most of its sports content in Dolby Atmos and Dolby Vision, is launching its streaming service in a dozen countries this summer as the platform approaches availability in 100 markets.

Dividend

Today, Dolby announced a cash dividend of $0.33 per share of Class A and Class B common stock, payable on August 20, 2025, to stockholders of record as of the close of business on August 12, 2025.

Financial Outlook

Dolby’s financial outlook relies, in part, on estimates of royalty-based revenue that take into consideration various factors that are subject to uncertainty, including consumer demand for electronic products. In addition, actual results could differ materially from the estimates Dolby is providing below due in part to uncertainty resulting from the macroeconomic effect of certain conditions, including developments concerning trade restrictions and changes in trade or diplomatic relationships, supply chain constraints, international conflicts, geopolitical instability, and fluctuations in inflation and interest rates. The uncertainty resulting from these factors has greatly reduced visibility into Dolby’s future outlook. To the extent possible, the estimates Dolby is providing for future periods reflect certain assumptions about the potential impact

of certain of these items, based upon a consideration of currently available external and internal data and information. These assumptions are subject to risks and uncertainties. For more information, see “Forward-Looking Statements” in this press release for a description of certain risks that Dolby faces, and the section captioned “Risk Factors” in its Quarterly Report on Form 10-Q for the third quarter of fiscal 2025, to be filed on or around the date hereof.

Dolby is providing the following estimates for its fourth quarter of fiscal 2025:

 

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Total revenue is estimated to range from $288 million to $318 million.

 

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Licensing revenue is estimated to range from $263 million to $293 million.

 

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Gross margins are anticipated to be approximately 86% on a GAAP basis and approximately 88% on a non-GAAP basis.

 

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Operating expenses are anticipated to range from $225 million to $235 million on a GAAP basis and from $190 million to $200 million on a non-GAAP basis.

 

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Effective tax rate is anticipated to be around 24.5% on a GAAP basis and around 21.0% on a non-GAAP basis.

 

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Diluted earnings per share is anticipated to range from $0.28 to $0.43 on a GAAP basis and from $0.61 to $0.76 on a non-GAAP basis.

Dolby is providing the following estimates for the full year of fiscal 2025:

 

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Total revenue is expected to range from $1.33 billion to $1.36 billion.

 

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Licensing revenue is estimated to range from $1.23 billion to $1.26 billion.

 

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Gross margins are anticipated to be approximately 88% on a GAAP basis and approximately 90% on a non-GAAP basis.

 

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Operating expenses are anticipated to range from $910 million to $920 million on a GAAP basis and from $765 million to $775 million on a non-GAAP basis.

 

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Dolby expects operating margins to be roughly 20% on a GAAP basis and to be roughly 33% on a non-GAAP basis.

 

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Effective tax rate is anticipated to be around 21.5% on a GAAP basis and around 20.0% on a non-GAAP basis.

 

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Diluted earnings per share is anticipated to range from $2.40 to $2.55 on a GAAP basis and from $3.88 to $4.03 on a non-GAAP basis.

Conference Call Information

Members of Dolby management will lead a conference call open to all interested parties to discuss third quarter fiscal 2025 financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, July 31, 2025. Access to the teleconference will be available at http://investor.dolby.com or by dialing 1-888-210-2212 (+1-646-960-0390 for international callers) and entering confirmation code 5587811.

A replay of the call will be available from 5:00 p.m. PT (8:00 p.m. ET) on Thursday, July 31, 2025, until 8:59 p.m. PT (11:59 p.m. ET) on Thursday, August 7, 2025 by dialing 1-800-770-2030 (+1-647-362-9199 for international callers) and entering the confirmation code 5587811. An archived version of the teleconference will also be available on the Dolby website, http://investor.dolby.com.

Non-GAAP Financial Information

To supplement Dolby’s financial statements presented on a GAAP basis, Dolby management uses, and Dolby provides to investors, certain non-GAAP financial measures as an additional tool to evaluate Dolby’s operating results in a manner that focuses on what Dolby’s management believes to be its ongoing business operations and performance. We believe these non-GAAP financial measures are also helpful to investors in enabling comparability of operating performance between periods and among peer companies. Additionally, Dolby’s management regularly uses our supplemental non-GAAP financial measures to make operating decisions, for planning and forecasting purposes and determining bonus payouts. Specifically, Dolby excludes the following as adjustments from one or more of its non-GAAP financial measures:

Stock-based compensation expense: Stock-based compensation, unlike cash-based compensation, utilizes subjective assumptions in the methodologies used to value the various stock-based award types that Dolby grants. These assumptions may differ from those used by other companies. To facilitate more meaningful comparisons between its underlying operating results and those of other companies, Dolby excludes stock-based compensation expense.

Amortization of acquisition-related intangibles: Dolby amortizes intangible assets acquired in connection with business combinations. These intangible assets consist of patents and technology, customer relationships, and other intangibles. Dolby records amortization charges relating to these intangible assets in its GAAP financial statements, and Dolby views these charges as items arising from pre-acquisition activities that are determined by the timing and valuation of its acquisitions. As these amortization charges do not directly correlate to its operations during any particular period, Dolby excludes these charges to facilitate an evaluation of its current operating performance and comparisons to its past operating results. In addition, while amortization expense of acquisition-related intangible assets is excluded from Non-GAAP Net Income, the revenue generated from those assets is not excluded.

Restructuring charges or credits: Restructuring charges are costs associated with restructuring plans and primarily relate to costs associated with exit or disposal activities, employee severance benefits, and asset impairments. Dolby excludes restructuring costs, including any adjustments to charges recorded in prior periods (which may be credits), as Dolby believes that these costs are not representative of its normal operating activities and therefore, excluding these amounts enables a more effective comparison of its past operating performance and to that of other companies.

Income tax adjustments: The income tax effects of the aforementioned non-GAAP adjustments do not directly correlate to its operating performance so Dolby believes that excluding such income tax effects provides a more meaningful view of its underlying operating results to management and investors.

Using the aforementioned adjustments, Dolby provides various non-GAAP financial measures including, but not limited to: non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, and non-GAAP effective tax rate. Dolby’s management believes it is useful for itself and investors to review both GAAP and non-GAAP measures to assess the performance of Dolby’s business, including as a means to evaluate period-to-period comparisons. Dolby’s management does not itself, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, superior to, or as a substitute for, financial information prepared in accordance with GAAP. Whenever Dolby uses non-GAAP financial measures, it provides a reconciliation of the non-GAAP financial measures to the most closely applicable GAAP financial measures. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures as detailed above and below. Investors are also encouraged to review Dolby’s GAAP financial statements as reported in its US Securities and Exchange Commission (SEC) filings. A reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release and on the Dolby investor relations website, http://investor.dolby.com.

Forward-Looking Statements

Certain statements in this press release and in our earnings calls, including, but not limited to, expected financial results for the fourth quarter of fiscal 2025 and full year fiscal 2025, Dolby’s ability to expand existing business, navigate challenging periods, pursue its long-term growth opportunities, and advance its other long-term objectives are “forward-looking statements” that inherently involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations, and as a result of certain risks and uncertainties, actual results may differ materially from those provided. The following important factors, without limitation, could cause actual results to differ materially from those in the forward-looking statements: the potential impacts of economic conditions on Dolby’s business operations, financial results, and financial position (including the impact to Dolby partners and disruption of the supply chain and delays in shipments of consumer products; the level at which Dolby technologies are incorporated into products and the consumer demand for such products; delays in the development and release of new products or services that contain Dolby technologies; delays in royalty reporting or delinquent payment by partners or licensees; lengthening sales cycles; the impact to the overall cinema market including adverse impact to Dolby’s revenue recognized on box-office sales and demand for cinema products and services; and macroeconomic conditions that affect discretionary spending and access to products that contain Dolby technologies); risks associated with geopolitical issues and international conflicts; risks associated with trends in the markets in which Dolby operates, including the broadcast, mobile, consumer electronics, PC, and other markets; the loss of, or reduction in sales by, a key customer, partner, or licensee; pricing pressures; risks relating to changing trends in the way that content is distributed and consumed; risks relating to conducting business internationally, including trade restrictions and changes in diplomatic or trade relationships; risks relating to maintaining patent coverage; the timing of Dolby’s receipt of royalty reports and payments from its licensees, including recoveries; changes in tax regulations; timing of revenue recognition under licensing agreements and other contractual arrangements; Dolby’s ability to develop, maintain, and strengthen relationships with industry participants; Dolby’s ability to develop and deliver innovative products and technologies in response to new and growing markets; competitive risks; risks associated with conducting business in countries that have historically limited recognition and enforcement of intellectual property and contractual rights; risks associated with the health of the motion picture and cinema industries generally; Dolby’s ability to increase its revenue streams and to expand its business generally, and to continue to expand its business beyond its current technology offerings; risks associated with acquiring and successfully integrating businesses or technologies; and other risks detailed in Dolby’s SEC filings and reports, including the risks identified under the section captioned “Risk Factors” in its Quarterly Report on Form 10-Q filed on or around the date hereof. Dolby may not actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements. Forward-looking statements are based upon information available to us as of the date of such statements, and while Dolby believes such information forms a reasonable basis for such statements, such information may be limited or incomplete. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, Dolby disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

About Dolby

Dolby Laboratories (NYSE: DLB) is a world leader in immersive entertainment. From movies and TV, to music, sports, gaming, and beyond, Dolby transforms the science of sight and sound into spectacular experiences for billions of people worldwide across all their favorite devices. We partner with artists, storytellers, and the brands you love to transform entertainment and digital experiences through groundbreaking innovations like Dolby Atmos, Dolby Vision, Dolby Cinema, and Dolby OptiView.

Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby OptiView, and the double-D symbol are among the registered and unregistered trademarks of Dolby Laboratories in the United States and/or other countries. Other trademarks remain the property of their respective owners.

DOLBY LABORATORIES, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts; unaudited)

 

		Fiscal Quarter Ended								Fiscal Year-To-Date Ended
		June 27, 2025				June 28, 2024				June 27, 2025				June 28, 2024
Revenue:
Licensing		$	289,905			$	267,082			$	966,390			$	899,089
Products and services			25,641				21,736				75,716				69,826
Total revenue			315,546				288,818				1,042,106				968,915
Cost of revenue:
Cost of licensing			21,713				17,386				62,508				48,440
Cost of products and services			22,289				18,277				58,105				58,060
Total cost of revenue			44,002				35,663				120,613				106,500
Gross profit			271,544				253,155				921,493				862,415
Operating expenses:
Research and development			65,982				65,501				194,327				195,027
Sales and marketing			86,163				77,518				270,191				246,559
General and administrative			72,307				69,275				212,814				201,183
Restructuring charges/(credits)			(547	)			4,078				8,879				7,674
Total operating expenses			223,905				216,372				686,211				650,443
Operating income			47,639				36,783				235,282				211,972
Other income/(expense):
Interest income/(expense), net			4,111				9,439				10,316				27,223
Other income, net			3,766				3,942				16,219				13,550
Total other income			7,877				13,381				26,535				40,773
Income before income taxes			55,516				50,164				261,817				252,745
Provision for income taxes			(8,974	)			(10,509	)			(54,979	)			(47,295	)
Net income including noncontrolling interest			46,542				39,655				206,838				205,450
Less: net income attributable to noncontrolling interest			(471	)			(1,211	)			(1,152	)			(2,195	)
Net income attributable to Dolby Laboratories, Inc.		$	46,071			$	38,444			$	205,686			$	203,255
Net income per share:
Basic		$	0.48			$	0.40			$	2.14			$	2.13
Diluted		$	0.48			$	0.40			$	2.11			$	2.09
Weighted-average shares outstanding:
Basic			95,897				95,686				95,947				95,593
Diluted			96,900				96,959				97,537				97,412

DOLBY LABORATORIES, INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands; unaudited)

 

		June 27, 2025				September 27, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	698,566			$	482,047
Restricted cash			57,998				95,705
Short-term investments			763				—
Accounts receivable, net			297,614				315,465
Contract assets, net			204,381				197,478
Inventories, net			32,415				33,728
Prepaid expenses and other current assets			46,382				69,994
Total current assets			1,338,119				1,194,417
Long-term investments			78,017				89,267
Property, plant, and equipment, net			478,481				479,109
Operating lease right-of-use assets			32,948				39,046
Goodwill and intangible assets, net			936,973				967,722
Deferred taxes			228,639				219,758
Other non-current assets			102,824				120,609
Total assets		$	3,196,001			$	3,109,928
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	17,234			$	17,380
Accrued liabilities			317,422				347,529
Income taxes payable			7,148				9,045
Contract liabilities			36,031				31,644
Operating lease liabilities			10,950				12,238
Total current liabilities			388,785				417,836
Non-current contract liabilities			29,029				34,593
Non-current operating lease liabilities			28,160				34,754
Other non-current liabilities			135,776				135,852
Total liabilities			581,750				623,035
Stockholders’ equity:
Class A common stock			54				53
Class B common stock			40				41
Retained earnings			2,618,163				2,496,255
Accumulated other comprehensive loss			(13,524	)			(19,187	)
Total stockholders’ equity – Dolby Laboratories, Inc.			2,604,733				2,477,162
Noncontrolling interest			9,518				9,731
Total stockholders’ equity			2,614,251				2,486,893
Total liabilities and stockholders’ equity		$	3,196,001			$	3,109,928

DOLBY LABORATORIES, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)

 

		Fiscal Year-To-Date Ended
		June 27, 2025				June 28, 2024
Operating activities:
Net income including noncontrolling interest		$	206,838			$	205,450
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			65,829				54,199
Stock-based compensation			97,462				90,146
Amortization of operating lease right-of-use assets			8,193				8,745
Amortization of premium on investments			—				(2,586	)
Provision for/(benefit from) credit losses			2,582				(2,382	)
Deferred income taxes			(9,146	)			(18,009	)
Other non-cash items affecting net income			(17,553	)			(6,181	)
Changes in operating assets and liabilities:
Accounts receivable, net			15,234				(21,319	)
Contract assets, net			(6,902	)			(8,642	)
Inventories			4,020				(4,615	)
Operating lease right-of-use assets			(1,717	)			(7,681	)
Prepaid expenses and other assets			46,972				7,527
Accounts payable and accrued liabilities			(48,979	)			(80,837	)
Income taxes, net			1,895				15,265
Contract liabilities			(1,061	)			(3,189	)
Operating lease liabilities			(8,237	)			(2,577	)
Other non-current liabilities			(6,063	)			(12,232	)
Net cash provided by operating activities			349,367				211,082
Investing activities:
Purchases of marketable securities			—				(147,646	)
Proceeds from sales of marketable securities			15,911				4,451
Proceeds from maturities of marketable securities			—				140,839
Proceeds from sale of assets held for sale			16,881				—
Purchases of property, plant, and equipment			(20,104	)			(22,628	)
Business combinations, net of cash and restricted cash acquired, and other related payments			(1,362	)			—
Net cash provided by/(used in) investing activities			11,326				(24,984	)
Financing activities:
Proceeds from issuance of common stock			38,681				39,487
Repurchase of common stock			(89,990	)			(139,999	)
Payment of excise tax on repurchase of common stock			(261	)			—
Payment of cash dividend			(95,010	)			(85,971	)
Distributions to noncontrolling interest			(1,449	)			(4,507	)
Shares repurchased for tax withholdings on vesting of restricted stock			(35,154	)			(37,428	)
Equity issued in connection with business combination			—				722
Net cash used in financing activities			(183,183	)			(227,696	)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash			1,302				2,256
Net increase/(decrease) in cash, cash equivalents, and restricted cash			178,812				(39,342	)
Cash, cash equivalents, and restricted cash at beginning of period			577,752				817,966
Cash, cash equivalents, and restricted cash at end of period		$	756,564			$	778,624

Licensing Revenue by Market

(unaudited)

The following table presents the composition of our licensing revenue and percentage of total licensing revenue for all periods presented (in thousands, except percentage amounts):

 

		Fiscal Quarter Ended																Fiscal Year-To-Date Ended
Market		June 27, 2025								June 28, 2024								June 27, 2025								June 28, 2024
Broadcast		$	111,286				38	%		$	95,430				36	%		$	321,297				33	%		$	313,326				35	%
Mobile			56,295				19	%			63,096				24	%			217,942				23	%			187,073				21	%
CE			28,071				10	%			28,352				11	%			115,668				12	%			123,793				14	%
PC			33,589				12	%			27,606				10	%			123,247				13	%			107,223				12	%
Other			60,664				21	%			52,598				19	%			188,236				19	%			167,674				18	%
Total licensing revenue		$	289,905				100	%		$	267,082				100	%		$	966,390				100	%		$	899,089				100	%

GAAP to Non-GAAP Reconciliations

(unaudited)

The following tables present Dolby’s GAAP financial measures reconciled to the non-GAAP financial measures included in this release for the third quarters of fiscal 2025 and fiscal 2024:

 

Net income:		Fiscal Quarter Ended
(in thousands)		June 27, 2025				June 28, 2024
GAAP net income attributable to Dolby Laboratories, Inc.		$	46,071			$	38,444
Stock-based compensation (1)			30,728				29,337
Amortization of acquisition-related intangibles (2)			10,016				3,101
Restructuring charges/(credits)			(547	)			4,078
Income tax adjustments			(10,606	)			(6,210	)
Non-GAAP net income attributable to Dolby Laboratories, Inc.		$	75,662			$	68,750
(1) Stock-based compensation included in above line items:
Cost of products and services		$	420			$	373
Research and development			9,188				9,456
Sales and marketing			10,589				9,726
General and administrative			10,531				9,782
(2) Amortization of acquisition-related intangibles included in above line items:
Cost of licensing		$	6,610			$	54
Cost of products and services			753				524
Sales and marketing			340				651
General and administrative			1,872				1,872
Other income, net			441				—
Diluted earnings per share:		Fiscal Quarter Ended
		June 27, 2025				June 28, 2024
GAAP diluted earnings per share		$	0.48			$	0.40
Stock-based compensation			0.32				0.30
Amortization of acquisition-related intangibles			0.10				0.03
Restructuring charges/(credits)			(0.01	)			0.04
Income tax adjustments			(0.11	)			(0.06	)
Non-GAAP diluted earnings per share		$	0.78			$	0.71
Weighted-average shares outstanding - diluted (in thousands)			96,900				96,959

The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial measures for the fourth quarter of fiscal 2025 and full year fiscal 2025 included in this release:

 

Gross margin:		Q4 2025				Fiscal 2025
GAAP gross margin			86.0%				88.0%
Stock-based compensation			0.1%				0.1%
Amortization of acquisition-related intangibles			1.9%				1.9%
Non-GAAP gross margin			88.0%				90.0%

 

Operating expenses (in millions):		Q4 2025				Fiscal 2025
GAAP operating expenses (low - high end of range)		$	225 - $235			$	910 - $920
Stock-based compensation			(32)				(127)
Amortization of acquisition-related intangibles			(3)				(9)
Restructuring charges			—				(9)
Non-GAAP operating expenses (low - high end of range)		$	190 - $200			$	765 - $775

 

Operating margin:		Fiscal 2025
GAAP operating margin			20% +/-
Stock-based compensation			9%
Amortization of acquisition-related intangibles			3%
Restructuring charges			1%
Non-GAAP operating margin			33% +/-

 

Effective tax rate:		Q4 2025				Fiscal 2025
GAAP effective tax rate			24.5	%			21.5	%
Stock-based compensation (low - high end of range)			(3%) - 1	%			(2%) - 0	%
Amortization of acquisition-related intangibles (low - high end of range)			(1%) - 0	%			(1%) - 0	%
Non-GAAP effective tax rate			21.0	%			20.0	%

 

Diluted earnings per share:		Q4 2025								Fiscal 2025
		Low				High				Low				High
GAAP diluted earnings per share (low - high end of range)		$	0.28			$	0.43			$	2.40			$	2.55
Stock-based compensation			0.31				0.31				1.32				1.32
Amortization of acquisition-related intangibles			0.11				0.11				0.42				0.42
Restructuring charges			—				—				0.09				0.09
Income tax adjustments			(0.09	)			(0.09	)			(0.35	)			(0.35	)
Non-GAAP diluted earnings per share (low - high end of range)		$	0.61			$	0.76			$	3.88			$	4.03
Weighted-average shares outstanding - diluted (in thousands)			96,600				96,600				97,200				97,200

Investor Contact:

Peter Goldmacher

415-254-7415

peter.goldmacher@dolby.com

Media Contact:

media@dolby.com