# Dolby Laboratories, Inc. (DLB) Informational only - not investment advice. CIK: 0001308547 SIC: 6794 Patent Owners & Lessors SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Holding And Other Investment Offices](/major-group/67/) > [SIC 6794 Patent Owners & Lessors](/industry/6794/) Latest 10-K filed: 2025-11-18 SEC page: https://www.sec.gov/edgar/browse/?CIK=1308547 Filing source: https://www.sec.gov/Archives/edgar/data/1308547/000130854725000007/dlb-20250926.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1349130000 | USD | 2025 | 2025-11-18 | | Net income | 255018000 | USD | 2025 | 2025-11-18 | | Assets | 3227760000 | USD | 2025 | 2025-11-18 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-11-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001308547.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | 1,054,600,000 | 1,241,620,000 | 1,161,792,000 | 1,281,256,000 | 1,253,793,000 | 1,299,744,000 | 1,273,721,000 | 1,349,130,000 | | Net income | 185,860,000 | 206,481,000 | 41,746,000 | 255,151,000 | 231,363,000 | 310,227,000 | 184,087,000 | 200,656,000 | 261,825,000 | 255,018,000 | | Operating income | 231,795,000 | 247,133,000 | 183,505,000 | 257,077,000 | 218,742,000 | 344,390,000 | 206,605,000 | 215,753,000 | 258,326,000 | 264,959,000 | | Gross profit | 916,756,000 | 961,648,000 | 927,038,000 | 1,080,766,000 | 1,015,294,000 | 1,151,231,000 | 1,112,433,000 | 1,147,178,000 | 1,133,225,000 | 1,188,998,000 | | Diluted EPS | 1.81 | 2.00 | 0.39 | 2.44 | 2.25 | 2.97 | 1.81 | 2.05 | 2.69 | 2.62 | | Assets | 2,310,106,000 | 2,533,554,000 | 2,865,387,000 | 2,821,749,000 | 2,917,325,000 | 3,105,687,000 | 2,689,548,000 | 2,979,766,000 | 3,109,928,000 | 3,227,760,000 | | Liabilities | 331,371,000 | 389,712,000 | 494,884,000 | 508,719,000 | 478,920,000 | 501,455,000 | 438,528,000 | 607,582,000 | 623,035,000 | 595,814,000 | | Stockholders' equity | 1,970,256,000 | 2,136,742,000 | 2,363,936,000 | 2,307,351,000 | 2,432,643,000 | 2,597,979,000 | 2,246,183,000 | 2,355,100,000 | 2,477,162,000 | 2,622,557,000 | | Cash and cash equivalents | 519,757,000 | 634,368,000 | 918,063,000 | 797,210,000 | 1,071,876,000 | 1,225,380,000 | 620,127,000 | 745,364,000 | 482,047,000 | 701,893,000 | | Net margin | | | 3.96% | 20.55% | 19.91% | 24.21% | 14.68% | 15.44% | 20.56% | 18.90% | | Operating margin | | | 17.40% | 20.70% | 18.83% | 26.88% | 16.48% | 16.60% | 20.28% | 19.64% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001308547.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-07-01 | | | 0.39 | reported discrete quarter | | 2023-Q1 | 2022-12-30 | | | 0.82 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | | 0.98 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | 298,370,000 | 16,399,000 | 0.17 | reported discrete quarter | | 2023-Q4 | 2023-09-29 | 290,562,000 | 9,186,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2023-12-29 | 315,574,000 | 66,981,000 | 0.69 | reported discrete quarter | | 2024-Q2 | 2024-03-29 | 364,523,000 | 97,830,000 | 1.01 | reported discrete quarter | | 2024-Q3 | 2024-06-28 | 288,818,000 | 38,444,000 | 0.40 | reported discrete quarter | | 2024-Q4 | 2024-09-27 | 304,806,000 | 58,570,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2024-12-27 | 356,999,000 | 67,822,000 | 0.70 | reported discrete quarter | | 2025-Q2 | 2025-03-28 | 369,561,000 | 91,793,000 | 0.94 | reported discrete quarter | | 2025-Q3 | 2025-06-27 | 315,546,000 | 46,071,000 | 0.48 | reported discrete quarter | | 2025-Q4 | 2025-09-26 | 307,024,000 | 49,332,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2025-12-26 | 346,706,000 | 53,327,000 | 0.55 | reported discrete quarter | | 2026-Q2 | 2026-03-27 | 395,630,000 | 94,915,000 | 0.99 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1308547/000130854726000010/dlb-20260327.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-30 Report date: 2026-03-27 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that are subject to risks and uncertainties, including, but not limited to statements regarding: operating results and underlying measures and the effect of acquisitions; demand and acceptance for our technologies and products; the effect of macroeconomic factors on our business; market growth opportunities and trends, including artificial intelligence and new technologies; the development and launch of new products, features, and platforms; our ability to maintain key partnership relationships; our plans, strategies and expected opportunities, including for our licensing business; future competition; our stock repurchase plan; and our dividend policy. Use of words such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," "intend," "could," "can," "would," "target," "goal," "outlook," "project," "contemplate," "future," or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions indicates a forward-looking statement. Such forward-looking statements are based on management's reasonable and current assumptions and expectations, but such statements inherently involve substantial risks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, including but not limited to the risks set forth in Part II, Item 1A, "Risk Factors" and key challenges set forth in Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations." Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe 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. We disclaim any duty to update any of the forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform our prior statements to actual results. Investors and others should note that we disseminate information to the public about our company, our products, services, and other matters through various channels, including our website (www.dolby.com), our investor relations website (http://investor.dolby.com), SEC filings, press releases, public conference calls, and webcasts, in order to achieve broad, non-exclusionary distribution of information to the public. We encourage investors and others to review the information we make public through these channels, as such information could be deemed to be material information. OVERVIEW Founded in 1965, we are in the business of improving entertainment experiences by inventing and innovating technologies that advance audio and video capture, transmission, and playback. We enable highly compelling experiences in movies and TV shows, music, sports and more by meeting the needs of content creators, distributors, and consumer electronics manufacturers. We have been at the forefront of multiple audio and video revolutions over the last sixty years including the transitions from mono to stereo then surround, analog to digital, and terrestrial broadcasting to streaming. Our strength and durability stem from our ability to combine our expertise in signal processing with our close relationships with artists and other industry experts to continually bring to the creative community technology that allows them to express themselves in new and compelling ways. Dolby is recognized within the entertainment industry for technologies designed to support high-quality entertainment from a consumer perspective and is fundamental to makers of consumer electronic devices as our technology is an important component in the creation and delivery of audio and video content. While some of our technology represents relatively elemental functions like audio signal compression that enable playback, we also offer technology that is innovating in emerging categories including spatial audio and high contrast video. We derive the majority of our revenue from licensing audio and video technology to electronics manufacturers, and a lesser portion of our revenue by offering premium audio and video technologies to cinema exhibitors. 38 Table of Contents STRATEGY Key elements of our strategy include: Advancing the Science of Sight and Sound. We apply our understanding of the human senses, audio, and imaging engineering by collaborating with music, TV and movie creators, and innovating in emerging categories like user-generated content, sports and podcasts, to develop and update technologies aimed at enabling and improving how people experience and interact with entertainment content. Delivering Superior Creative Experiences. We promote the use of our solutions as creative tools that allow filmmakers, musical artists, sound mixers, and other content creators and providers to fully express their creative intent to their audiences. Our technologies and solutions significantly improve delivery and playback so that consumers may enjoy richer, clearer, and immersive sound and sight experiences. Building Ecosystems that Benefit from and Sustain Demand for our Solutions. We work closely with content creators, content distributors, and device makers to enable them to deliver great experiences to their audiences, creating a virtuous cycle of product development, improved experiences, and sustained demand for our solutions. We also work closely with technology developers to create and promote standardized technologies that enable content to be enjoyed any place, any time on a broad range of devices. Expanding the Reach of our Technologies. We look for new and innovative ways to apply our expertise in the science of sight and sound to expand the reach of our technologies to new content, media, devices, and audiences. PRODUCTS AND REVENUE GENERATION We generate most of our revenue by licensing technology, our brand, and patents to device manufacturers, and selling cinema hardware and services to movie exhibitors. The following table presents a summary of the composition of our revenue for all periods presented (in thousands, except percentage amounts). Refer to Note 3 "Revenue Recognition" for further detail. Fiscal Quarter Ended Fiscal Year-To-Date Ended Revenue March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 Licensing $ 372,245  94  % $ 346,006  94  % $ 692,016  93  % $ 676,485  93  % Products and services 23,385  6  % 23,555  6  % 50,320  7  % 50,075  7  % Total revenue $ 395,630  100  % $ 369,561  100  % $ 742,336  100  % $ 726,560  100  % Licensing The two primary components of our licensing business are Branded Technologies which include Branded Audio Codecs, Dolby Atmos & Dolby Vision, and Patents, which include Audio Patents and Imaging Patents. We generated over 90% of our revenue in the second quarters of fiscal 2026 and fiscal 2025, and the fiscal year-to-date periods ended March 27, 2026 and March 28, 2025 from agreements to license branded technology and patents that enable approximately 1,000 electronic device manufacturers to enable and enhance the audio and visual capabilities of their products by incorporating our technology. As of March 27, 2026, we had approximately 30,200 issued patents relating to technologies, that are licensed to third parties and comprise a significant portion of our licensing revenue. We have approximately 1,500 trademark registrations throughout the world for a variety of wordmarks, logos, and slogans. These trademarks are an integral part of our technology licensing program as licensees typically place them on their products that incorporate our technologies to inform consumers that they have met our quality specifications. Branded Technology Licensing Dolby branded technologies offer enhanced audio and video experiences for consumers. Dolby branded technologies enjoy widespread adoption, are occasionally mandated as standards, and are frequently considered fundamental to a wide variety of devices and types of entertainment content, including movies, TV shows, sports and music. Our branded technology solutions are complete solutions. We provide licensees with software, patent rights, and know how to enable content creation, delivery, and playback. Our branded offerings are designed to support ease of adoption and deployment. Additionally, our device partners derive value from the use of the Dolby brand, which is synonymous with high quality entertainment. 39 Table of Contents Dolby branded technologies are part of a unique and broad ecosystem that includes content creators, distributors (such as streaming media companies and broadcasters), and device manufacturers. Initial ecosystem adoption of these technologies yields a virtuous cycle. The more content made available using our branded technologies, the higher the likelihood that more devices embed our technology to facilitate the playback of that content. The more device manufacturers include our technology, the more content creators and distributors want to make content available in Dolby formats. Branded Audio Codecs A significant portion of our branded licensing is centered on audio codecs: compression and decompression technologies for audio. The most important of these are the following: •DD+. DD+ is an advanced surround sound audio codec technology that enables the Dolby audio experience across home theaters, smartphones, operating systems, and browsers. A versatile, bandwidth efficient, and scalable home theater grade audio codec for A/V content, DD+ is designed to deliver up to 7.1 channels of surround sound across multiple platforms and content types. •Dolby AC-4. Dolby AC-4 is an audio codec that delivers equivalent experiences at half the bitrate of DD+, its predecessor. Dolby AC-4 matches the delivery method with the optimal configuration, enabling encodes tailored for broadcast or streaming and catering to headphone or speaker playback. It is also capable of delivering enhanced, user-configurable, and accessible experiences. The Dolby AC-4 coding system utilizes new aspects of object audio for features like dialogue enhancement or commentator substitution. Dolby Atmos and Dolby Vision Dolby Atmos and Dolby Vision are Dolby’s next generation of branded licensing products. They represent significant innovations, and enable consumers to enjoy increasingly immersive audio and video experiences. Dolby Atmos and Dolby Vision include encoding technologies that artists use to create more compelling and immersive audio and video experiences, as well as a set of decoding technologies that device manufacturers include on their devices to decode the content the artists have created. •Dolby Atmos. Dolby Atmos is a three-dimensional audio experience with object-based sound technology using up to 128 audio objects that can be positioned anywhere to allow for pr [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those referred to herein due to a number of factors, including but not limited to key challenges listed below and risks described in Part I, Item 1A "Risk Factors" and elsewhere in this Annual Report on Form 10-K. We disclaim any duty to update any of the forward-looking statements after the date of this Annual Report on Form 10-K to conform our prior statements to actual results. Investors and others should note that we disseminate information to the public about our company, our products, services, and other matters through various channels, including our website (www.dolby.com), our investor relations website (http://investor.dolby.com), SEC filings, press releases, public conference calls, and webcasts, in order to achieve broad, non-exclusionary distribution of information to the public. We encourage investors and others to review the information we make public through these channels, as such information could be deemed to be material information. MACROECONOMIC CONDITIONS Our revenue can be negatively impacted by macroeconomic conditions, including but not limited to, the financial health of our licensees, inflation, heightened interest rates, foreign exchange rates, rising costs of material, increased shipping costs, tariffs and trade barriers, international conflicts, labor disputes, reduced discretionary consumer spending, and reduced new product investment by our customers. In particular, the U.S. has recently implemented tariffs on certain imports and some U.S. trading partners have implemented or announced retaliatory tariffs or other trade barriers. The situation is highly dynamic and the potential impacts are impossible to predict with certainty. For example, any increases in tariffs or other trade barriers may, directly or indirectly, increase the cost of producing or delivering our products, increase the costs to our licensees of licensing our technology, and may decrease demand for our products and services. If the costs or lead times required for our licensees to manufacture and export their products, such as consumer electronics products and cars, result in higher prices or longer lead times for end consumers, sales of those products may decrease and thus royalty payments payable to Dolby that are based on unit shipments may decrease. Any of the foregoing impacts could negatively impact our revenue from licensing and product sales. Macroeconomic conditions also impart substantial uncertainty into our operating environment and may lead to follow-on negative economic effects like recession or heightened inflation, each of which presents additional challenges for our business. Uncertainty or an adverse economic climate may cause delays or a decrease in the adoption of our technologies into new products by partners and licensees, or lead manufacturers to discontinue including our technology in their products or to seek price reductions. These conditions may impact consumer demand for our licensees’ products that incorporate our technology and for our own products and services. Further, the noted macroeconomic conditions and related uncertainty may negatively impact transaction cycles and our recovery of revenue associated with past unauthorized or unreported usage. The future implications of these macroeconomic conditions on our business, results of operations and overall financial position remain uncertain. We continue to monitor the evolving macroeconomic environment, including the imposition of tariffs and other trade barriers, and the impact on our business. Further discussion of the potential impacts of these macroeconomic effects on our business can be found in Part I, Item 1A "Risk Factors." LICENSING The majority of our revenue is derived from two licensing models, Branded Technology Licensing and Patent Licensing, each of which individually comprises a substantial portion of our revenue. While each has had successes, they share certain challenges. In particular, factors such as global supply constraints or device lifecycles may impact licensing revenue. Further, in certain countries, we and other IP owners face difficulties enforcing contractual and IP rights, including instances in which our licensees fail to accurately report the shipment of products using our technologies. Finally, we face geopolitical challenges including changes in diplomatic and trade relationships, trade protection measures including the imposition of tariffs, and import or export licensing requirements. Further discussion of the potential impacts of the key challenges on our business can be found in Part I, Item 1A "Risk Factors." Branded Technology Licensing Dolby’s branded technology licensing offers complete technology solutions to our licensees, primarily device manufacturers. Licenses include rights to software, patent rights, know-how, and the relevant Dolby brand. Our 33 Table of Contents branded technologies are primarily comprised of Branded Audio Codecs (DD+ and AC-4) and Dolby Atmos and Dolby Vision (Dolby Atmos for audio, and Dolby Vision for imaging). Licensing revenue is primarily driven by the adoption of our technologies on devices and the number of devices shipped by licensees. Our branded audio codecs have broad penetration across a diverse set of devices and end markets. Revenue from these technologies is primarily driven by device shipments from licensees, and as such, is impacted by consumer spending. The remaining portion of our branded licensing revenue is derived from Dolby Vision and Dolby Atmos. Dolby Vision and Dolby Atmos have not been in the market as long as our branded audio codecs, thus revenue growth is driven by device shipments, increased adoption and the addition of new licensees. We are focused on expanding our leadership in audio and imaging solutions for premium entertainment content by increasing the number of Dolby experiences that people can enjoy, which will drive revenue growth across the markets we serve. We work across our ecosystem of partners including creators, distributors and device manufacturers to increase the number of Dolby experiences that people can enjoy by enhancing content, including movies and TV, music and live sports, using Dolby branded technologies. Increased content in these areas increases our value proposition across our end markets. In movies and TV, thousands of movie titles and tens of thousands of TV episodes have been created and released in Dolby Atmos and/or Dolby Vision. Major streaming partners and services such as Netflix, Disney+, Apple TV, Amazon, HBO Max, Paramount+, and other streaming partners and services internationally, continue to enhance content in Dolby Vision and Dolby Atmos. In sports, the Super Bowl, March Madness, FIFA Club World Cup soccer, the Stanley Cup Finals, the French Open, the Indian Premier League playoffs and finals, and the World Test Cricket Championship Final were available in Dolby. Also, Peacock currently streams its NFL Sunday Night Football games and NBA games in Dolby Atmos. Patent Licensing Our patents are incorporated into the AAC, HE-AAC, and Extended HE-AAC standards for audio, and the AVC and HEVC standards for imaging. The licensing of these patents forms the core of our patent licensing. Revenue generated through our patent licensing model is driven primarily by our royalty share within patent pools, licensee penetration, device shipments, and the introduction of new standardized technologies and patent programs. In fiscal 2025, we expanded our imaging program footprint by participating as a licensor in the launch of the new Video Distribution Program administered by Access Advance. This patent pool expands the growth opportunity for imaging patents beyond device makers to content distributors. While still in the early phase of development, the pool has already secured 33 licensors, including notable licensors like Mitsubishi, Philips, Hyundai, Alibaba and Oppo, and five licensees, including ByteDance, Kuaishou, NTT Docomo and Tencent. We expect to start generating revenue from the program in fiscal 2026 and, as streaming continues to grow in popularity, we expect this new patent pool will be an important growth driver for Dolby. In fiscal 2024, we acquired GE Licensing (as defined below), which strengthened our position in existing programs, most notably in modern video codecs like HEVC. In fiscal 2025 we completed the integration of GE Licensing by incorporating people, processes, and core assets into Dolby while divesting non-core programs and other assets. In fiscal 2025, we, together with our patent pool partners, renewed existing licensees and increased licensee penetration in established imaging programs across multiple end markets. Access Advance entered into 32 new licenses for its HEVC program, including licenses with HP, TCL and Adobe. In October 2025, Microsoft and Google joined Via LA’s HEVC/VVC patent pool as licensees. Via LA continued to make progress adding new licensees to its AAC patent pool, in which we are a licensor. Vectis added Panasonic, Ford, Epson, and ALPS Alpine as new licensees to their OPUS Patent Pool, in which we are a licensor. Revenue from our patent licensing is driven, in part, by the adoption and use of the standardized technologies in which we participate by device manufacturers. As in any technology licensing business, it is possible that changing partner preferences, consumer preferences, or other market dynamics could lead to increased or decreased adoption, or the use of alternative technologies. Revenue derived from our patent licensing programs is also driven by the success of the patent pools in which we participate, which is driven by licensee, licensor, and program renewals. The revenue we derive from patent pools also depends significantly on the patent pool administrators’ success in negotiating licenses with companies already using the relevant standard (i.e. licensee penetration). Additionally, our licensing revenue from patent pools is driven, 34 Table of Contents in part, by the royalty share among pool licensors, which is determined based on the value of the patents each licensor contributes to the pool, as governed by allocation rules negotiated among the pool licensors. The standardized technologies at the core of our patent licensing are intended for broad use across all device categories that play back audio and visual content. Device manufacturers typically negotiate and acquire the patent rights for these technologies for implementation across all their device categories and product lines in their applicable end markets. For a discussion of certain risks related to our patent licensing model, please refer to Part I, Item 1A "Risk Factors" in this annual report on Form 10-K, in particular the sections under the headings "Technology Standards" and "Intellectual Property." Licensing End Markets The following are highlights and key challenges related to Dolby’s licensing businesses, by market. Broadcast Highlights We have an established global presence and broad adoption of our branded audio and patent licensing technologies in broadcast services and devices, which primarily include TVs and STBs. We work with many TV OEMs and strategic partners to enable and promote Dolby Vision and Dolby Atmos experiences within their TV lineups. We have strong attach rates for Dolby Atmos and Dolby Vision with high end TVs and continue to grow adoption on mid-range TVs. Many partners continue to expand their support of the combined Dolby Vision and Dolby Atmos experience. In fiscal 2025, we announced Dolby Vision 2, which is expected to improve picture quality and unleash the full capabilities of modern TVs, by automatically adjusting contrast via ambient light detection, optimizing motion control for sports and gaming content, and tone mapping that enables creators to take full advantage of the latest advancements in higher end TV displays. Hisense and TCL announced that they will release TVs that support Dolby Vision 2. Key Challenges Our pursuit of new licensees and further adoption of our technologies by existing licensees may be impacted by a number of factors. We must continue to present compelling reasons for consumers to demand our audio and video technologies, including ensuring that there is a breadth of available content in our formats and such content is being widely distributed. To the extent that OEMs do not incorporate our technologies in current and future products or our technology is not included in future broadcast industry standards, our revenue could be negatively impacted. Changing trends in the way that video content is distributed and consumed may impact our business and future growth in the broadcast market, such as the trend away from subscription-based cable and satellite television providers toward streaming services. Mobile Highlights We continue to promote adoption of our technologies across major mobile ecosystems, including Apple and Android. Our patent licensing technologies are adopted broadly throughout the mobile device ecosystem. Dolby Atmos and Dolby Vision are included throughout the Apple device line-up and in Apple TV, and Dolby Atmos is included in Apple Music. Dolby Vision Capture has been supported on all iPhones since the iPhone 12. We have strong adoption of Dolby Atmos and our branded audio codecs across high-end Android mobile devices and are focused on growing our presence on low and mid-tier phones. An increasing number of Android device manufacturers have adopted Dolby Vision and Dolby Vision Capture on high end devices and we are focused on the opportunity to significantly increase our adoption. The breadth of mobile devices supporting Dolby technologies continues to increase globally. In fiscal 2025, device manufacturers such as OPPO, Motorola, and Xiaomi released new mobile devices supporting Dolby technologies such as Dolby Vision, Dolby Vision Capture, and Dolby Atmos. Additionally, Douyin, known in many parts of the world as TikTok, has made Dolby Vision available to it users in China and has offered their users the ability to capture, share and edit content in Dolby Vision. Instagram for iOS is now the first Meta app to support Dolby Vision. Key Challenges 35 Table of Contents Growth in this market is dependent on several factors. Due to short product life cycles, mobile device OEMs can readily add or remove certain of our technologies from their devices. Our success depends on our ability to address the rapid pace of change in mobile devices, and we must continuously collaborate with mobile device OEMs to incorporate our technologies. We rely on a small number of partnerships with key participants in this market. If we are unable to maintain these key relationships, we may experience a decline in mobile devices incorporating our technologies. To the extent that OEMs do not incorporate our technologies in current and future products or our technology is not included in future mobile industry standards, our revenue could be impacted. We must also continue to support the development and distribution of Dolby-enabled content via various ecosystems. Consumer Electronics Highlights We have an established presence in the home entertainment market across devices such as wireless and smart speakers, soundbars, DMAs (devices that connect a home media system to the internet), and AVRs, through the inclusion of our branded audio codecs, and increasingly through the inclusion of Dolby Atmos and Dolby Vision. Our patent licensing technologies also have broad adoption in the home entertainment market. We continue to focus on expanding the availability of Dolby technologies to new devices. In fiscal 2025, several new soundbars featuring Dolby technologies such as Dolby Atmos were introduced from various manufacturers including Harman Kardon, Samsung, LG, and Sonos. Key Challenges We must continue to present compelling reasons for consumers to demand our technologies wherever they enjoy entertainment content, while promoting creation and broad availability of content in our formats. With relatively short product life cycles for many consumer electronics, OEMs can add or remove certain of our technologies from their products which could impact our revenue. In addition, to the extent that our technology is not included in future industry standards, our revenue could be impacted. Personal Computers Highlights DD+ enhances audio playback in Mac computers through the operating system with native support in the Safari browser, and Windows-based PCs through PC OEM implementations and native support in the Microsoft Edge browser. Dolby's presence in these browsers enables us to reach more users through various types of content, including streaming video entertainment. A number of PCs from partners such as Apple, Lenovo, Dell, Samsung, Microsoft, and ASUS also support Dolby Vision and/or Dolby Atmos, with continued expansion of applications through music, streaming, and gaming. Key Challenges Demand for PCs has fluctuated significantly in recent years. We must continuously collaborate and maintain our key partnerships with PC manufacturers to incorporate our technologies, and we must continue to support the development and distribution of Dolby-enabled content via various ecosystems. To the extent that PC manufacturers do not incorporate our technologies in current and future products, our revenue could be impacted. Other Markets Highlights We generate revenue from the automotive industry primarily through the adoption of Dolby Atmos in cars. In fiscal 2025, many car manufacturers announced or launched new models that support Dolby Atmos, such as Porsche, Cadillac, Volvo, Xiaomi, Hyundai, and Audi. NIO, ZEEKR, and Li Auto announced new car models that support Dolby Vision. Also, Pioneer, the biggest manufacturer of after-market car audio systems, demonstrated how Dolby Atmos could be used in an aftermarket solution using a 4-channel speaker system, expanding the market opportunity for Dolby Atmos in the car. Samsung Display is working with Dolby to pre tune its OLED displays for autos to ease manufacturers' adoption of Dolby Vision, and Texas Instruments launched its new family of chips for automakers which support Dolby Atmos. Gaming consoles such as the Sony PlayStation and the Microsoft Xbox use DD+ to support gaming content and streaming for movie and television content. The PlayStation 5 supports compatible Dolby Atmos-enabled living room 36 Table of Contents devices. The Xbox Series X and Series S gaming consoles support Dolby Vision and Dolby Atmos for streaming and gaming content. Additionally, our technologies continue to be incorporated into the latest headphones by various OEMs. Key Challenges Our automotive-related revenue growth will be impacted if OEMs do not incorporate our technologies in their latest products. The long development cycle of the automotive industry reduces the frequency of our opportunities to be incorporated into additional products. Additionally, the automotive industry is cyclical, so our revenue from the auto market is affected by the broader cycles of the industry. Consumer demand for gaming devices is impacted by anticipation of console refresh cycles, which could result in fluctuations in our revenue. In addition, the gaming console market has competition from mobile devices and gaming PCs, which have faster refresh cycles and appeal to a broader consumer base. Included within Other Markets is also licensing revenue from audio and video technologies used to create Dolby experiences through Dolby Cinema. Dolby Cinema Highlights: We continue to expand our global presence for Dolby Cinema, with sites located in the U.S. and internationally. In fiscal 2025, we announced with AMC that we will add an additional 40 Dolby Cinemas at AMC locations in the U.S. through the end of calendar year 2027. We also announced that we are launching Dolby Cinema in India this year, beginning with six exhibitors that are expected to be open by the end of fiscal 2026. We increased the number of Dolby Atmos and Dolby Vision theaters or exhibitors in South Korea, Taiwan, and Europe. Key Challenges: Although the PLF market for the cinema industry has been growing, Dolby Cinema competes with other existing offerings. Our success depends on our partners and their success, and our ability to differentiate our offering and deploy new sites. In addition, the success of our Dolby Cinema offering is tied to global movie production and box office performance generally. PRODUCTS AND SERVICES A majority of our Products and Services revenue is derived from the sale of audio and imaging products for the cinema industry. Revenue from Dolby OptiView is also included in products and services. Cinema Products and Services Highlights To help enable the playback of content in Dolby formats, we offer a range of servers, which include the IMS3000 (an integrated imaging and audio server with Dolby Atmos), and audio processors, such as the CP950, to cinema exhibitors globally. Dolby Atmos has been adopted broadly across studios, content creators, post-production facilities, and exhibitors. As of the end of fiscal 2025, there are over 8,500 Dolby Atmos screens installed or committed and over 4,300 Dolby Atmos theatrical titles have been announced or released. We also offer a variety of other cinema products, such as the Dolby Multichannel Amplifier and our high-power flexible line of speakers. These products allow us to offer exhibitors a more complete Dolby Atmos solution that is often more cost effective than other commercially available options. Key Challenges Demand for our cinema products is dependent upon our partners and their success in the market, industry and economic cycles, box office performance, and our ability to develop and introduce new technologies, further our relationships with content creators, and promote new cinematic audio and video experiences. A significant portion of our growth opportunity lies in international markets, which are subject to geopolitical risks. Additionally, weakness in general economic conditions due to inflation, recession, the imposition of tariffs and other trade barriers, or other unfavorable economic conditions could have a negative impact on our cinema-related revenue due to reduced consumer discretionary spending. We may also be faced with pricing pressures or competing technologies, which would affect our revenue. In addition, supply chain constraints may impact our ability to provide cinema products and services to our customers. Long lead times and increased cost of materials due to the macroeconomic conditions, including higher interest rates have also negatively impacted the financial health of our cinema customers and partners, leading to reduced new product investment and lower demand. 37 Table of Contents Dolby OptiView Highlights Our strategy for Dolby OptiView is to bring Dolby’s audio and video technologies to a broader range of media content and digital experiences. We are expanding our addressable market by offering solutions to companies building real-time digital experiences that increase audience engagement. For instance, our solution can provide the capability to stream high quality audiovisual content with ultra-low latency that reduces the delay between the action and the viewer. Content being delivered with almost no delay enables our customers to create real-time interaction in their apps and services. This near instantaneous interaction is essential to the experiences companies, particularly in sports and entertainment, are creating. Over time, we believe this way of delivering and engaging with content will be used more broadly, thereby increasing their business opportunity. Key Challenges Dolby OptiView is an early-stage business, and it is uncertain when or if it will be a material revenue driver. Our success in this market will depend on adoption by companies building real-time digital experiences that increase audience engagement, the volume of usage of the services and our ability to monetize our services. In addition, the development and maintenance needed to provide a reliable and scalable platform may require us to incur additional costs to develop new skills within our existing employee base or hire external specialized talent. Although the market for real-time experiences has been growing, Dolby OptiView competes with other offerings from third parties. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP, pursuant to SEC rules and regulations. The preparation of these financial statements requires us to establish accounting policies and make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses. The SEC considers an accounting policy and estimate to be critical if it is both important to a company’s financial condition or results of operations and requires significant judgment by management in its application. On a regular basis, we evaluate our assumptions, judgments, and estimates, and historically, actual results have not differed significantly from them. If actual results or events differ materially from our judgments and estimates, our reported financial condition and results of operation for future periods could be materially affected. We have reviewed the selection and development of the critical accounting policies and estimates discussed below with the Audit Committee of our Board of Directors. Revenue Recognition We derive our revenue primarily from the licensing of our technologies and patents. In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates within the revenue recognition process. Generally, revenue is recognized upon transfer of control of promised products, services or IP rights to customers in an amount that reflects the consideration that we expect to receive in exchange for those products, services or licensing of the IP rights. The primary judgments include estimating sales-based revenue in advance of receiving statements from our licensees, estimating variable consideration, identifying the performance obligations in the contract, and determining whether the performance obligations are distinct, and allocating consideration accordingly. Most of our licensing arrangements are structured as sales-based whereby we are paid a unit-based royalty. The unit-based sales data that triggers the royalty obligation is generally reported to us in the quarter after triggering the royalty obligation. We apply the royalty exception to these arrangements, which requires that we recognize sales-based royalties when the sales occur based on our estimates. Our estimates of royalty-based revenue take into consideration the macroeconomic effect of global events, such as inflation, elevated interest rates, economic impacts related to industry challenges, or other economic conditions, which may impact supply chain activities as well as demand for shipments. These estimates also involve the use of historical data and judgment for several key attributes including industry estimates of expected shipments, the percentage of markets using our technologies, and average sale prices. Generally, our estimates represent the current period’s shipments for which we expect our licensees to submit royalty statements in the following quarter. Upon receipt of royalty statements from the licensees with the 38 Table of Contents actual reporting of sales-based royalties that we previously estimated, we record a favorable or unfavorable adjustment based on the difference, if any, between estimated and actual sales. We also enter into fixed and guaranteed licensing fee arrangements, that require the licensee to pay a fixed, non-refundable fee. In these cases, control is transferred and the transaction price - the amount we expect to be entitled to in exchange for the license right - is recognized upon the later of contract execution or the effective date. Transaction price is determined at contract execution and, to the extent variable consideration applies, is updated each subsequent reporting period until the completion of the contract. We evaluate whether other distinct performance obligations exist, such as PCS, and determine the stand-alone selling price. We do so by considering actual stand-alone sales in addition to market conditions such as competitor pricing strategies, customer specific information and industry technology lifecycles, internal conditions such as cost and pricing practices, or applying the residual approach method when the selling price of the good, most commonly a license, is highly variable or uncertain. In addition, we evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments that occur over time and extend beyond one year. In general, if the payment arrangements extend beyond the first year of the contract, we treat a portion of the payments as a financing component. The discount rate used for each arrangement reflects the rate that would be used in a separate financing transaction between us and the licensee at contract inception and takes into account the credit characteristics of the licensee and market interest rates as of the date of the agreement. If we assess the financing component to be significant to the contract, the amount of fixed fee revenue recognized at the beginning of the license term will be reduced by the calculated financing component. The portion related to the financing component is recorded as interest income, and is not material to our consolidated financial statements. For additional information, see Note 3 "Revenue Recognition" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. IMPACT OF NEW ACCOUNTING STANDARDS NOT YET ADOPTED For information on recent accounting standards that have not been adopted yet and the impact of these standards on our consolidated financial statements, refer to Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements in this Annual Report on Form 10-K. RESULTS OF OPERATIONS For each line item included on our consolidated statements of operations described and analyzed below, the significant factors identified as the leading drivers contributing to the overall fluctuation are presented in descending order of their impact on the overall change (from an absolute value perspective). This discussion and analysis highlights comparisons of material changes in the consolidated financial statements for the years ended September 26, 2025 and September 27, 2024. For the discussion and analysis highlighting comparisons of material changes in the consolidated financial statements for the years ended September 27, 2024 and September 29, 2023, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended September 27, 2024, which is incorporated herein by reference. Note that adjustments related to sales-based royalties that were misreported by licensees as well as unlicensed settlement activity, are collectively referred to as "recoveries." Amounts displayed, except percentages, are in thousands. Revenue and Gross Margin Licensing Licensing revenue consists of fees earned from licensing our technologies to customers who incorporate them into their products and services to enable and enhance audio and imaging capabilities. The technologies that we license are either internally developed, acquired, or licensed from third parties. We also generate administrative fees for managing patent pools on behalf of third party patent owners through our subsidiary, Via LA. A significant portion of our licensing revenue pertains to customer-shipment royalties that we recognize based on estimates of our licensees’ shipments. To the extent that shipment data reported by licensees differs from estimates we made and recorded, we recognize an adjustment to revenue for such difference in the period we receive the reported shipment data. 39 Table of Contents Our cost of licensing consists mainly of amortization of certain purchased intangible assets and intangible assets acquired in business combinations, depreciation, third party royalty obligations, and patent pool fees. Fiscal Year Ended Change Licensing September 26, 2025 September 27, 2024 $ % Revenue $ 1,248,017  $ 1,181,794  $ 66,223  6  % Percentage of total revenue 93  % 93  % Cost of licensing 83,619  67,204  16,415  24  % Gross profit 1,164,398  1,114,590  49,808  4  % Gross margin 93  % 94  % Fiscal Year Ended Licensing Revenue By Market September 26, 2025 September 27, 2024 Broadcast $ 428,471  34  % $ 409,105  35  % Mobile 268,568  22  % 235,774  20  % CE 150,704  12  % 165,817  14  % PC 151,894  12  % 141,300  12  % Other 248,380  20  % 229,798  19  % Total licensing revenue $ 1,248,017  100  % $ 1,181,794  100  % Factor Licensing Revenue Gross Margin Mobile á Higher revenue from our imaging patent programs due to the GE Licensing acquisition and timing of our audio patent minimum volume commitments á Higher licensing revenue, partially offset by higher intangible asset amortization expense from recent business combinations Broadcast á Higher revenue from timing of minimum volume commitments, adoption of Dolby Vision and Dolby Atmos, and higher revenue from our imaging patent programs Other á Higher automotive revenue due to adoption of Dolby Atmos and Dolby Vision and higher Dolby Cinema revenue due to better box office receipts and additional Dolby Cinema sites, partially offset by lower gaming revenue due to timing of minimum volume commitments CE â Lower revenue from audio patent minimum volume commitments, lower recoveries, and lower unit shipments PC á Higher revenue from our imaging patent programs and higher recoveries, partially offset by lower revenue from our foundational audio technologies Products and Services Products revenue is generated from the sale of audio and imaging hardware and software products for the cinema, television, broadcast and entertainment industries. Also included in Products revenue are amounts relating to certain Dolby Cinema arrangements that are considered sales-type leases that involve fixed or minimum fees. Cost of products includes materials, labor, manufacturing overhead, amortization of certain intangible assets, and certain third party royalty obligations. Services revenue consists of fees charged to support theatrical and television production for cinema exhibition, broadcast, and home entertainment, including equipment training and maintenance, mixing room alignment, equalization, as well as audio, color, and light image calibration. Services revenue also includes PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners and support for the implementation of our technologies into products manufactured by our licensees. Also included in Services revenue are amounts generated through Dolby OptiView. Cost of services consists of personnel and personnel-related costs for providing our professional services, software maintenance and support, external contractors, and other direct expenses incurred on behalf of customers. Fiscal Year Ended Change Products and Services September 26, 2025 September 27, 2024 $ % Revenue $ 101,113  $ 91,927  $ 9,186  10  % Percentage of total revenue 7  % 7  % Cost of products and services 76,513  73,292  3,221  4  % Gross profit 24,600  18,635  5,965  32  % Gross margin 24  % 20  % 40 Table of Contents Factor Products and Services Revenue Gross Margin Products ßà No significant fluctuations ßà No significant fluctuations Services á Higher Dolby OptiView revenue as compared to the prior year á Higher gross margin due to higher Services revenue Operating Expenses Research and Development R&D expenses consist primarily of employee compensation and benefits expenses, stock-based compensation, external contractor costs, depreciation and amortization, facilities costs, costs for outside materials, and information technology expenses. Fiscal Year Ended Change September 26, 2025 September 27, 2024 $ % Research and development $261,792 $263,663 $(1,871) (1)% Percentage of total revenue 19% 21% Category Key Drivers Research and Development ßà No significant fluctuations Sales and Marketing S&M expenses consist primarily of employee compensation and benefits expenses, stock-based compensation, marketing and promotional expenses for events such as trade shows and conferences, marketing campaigns, travel-related expenses, contractor fees, facilities costs, depreciation and amortization, information technology expenses, and legal costs associated with unreported and underreported use of our IP. Fiscal Year Ended Change September 26, 2025 September 27, 2024 $ % Sales and marketing $360,711 $334,460 $26,251 8% Percentage of total revenue 27% 26% Category Key Drivers Legal, Professional, and Contractors á Higher costs of $14.3 million primarily due to litigation activities Compensation & Benefits á Higher costs of $11.7 million due to bonus achievement, benefits and wage taxes, and higher salaries expense Marketing â Lower costs of $7.4 million primarily due to non-repeating marketing activities in the prior year Stock-based compensation á Higher costs of $4.4 million primarily due to increase in RSU share count and lower benefit from forfeitures due to restructuring activities in the prior year General and Administrative G&A expenses consist primarily of employee compensation and benefits expenses, stock-based compensation, depreciation and amortization, facilities and information technology costs, as well as professional fees and other costs associated with external contractors. Fiscal Year Ended Change September 26, 2025 September 27, 2024 $ % General and administrative $286,529 $270,392 $16,137 6% Percentage of total revenue 21% 21% 41 Table of Contents Category Key Drivers Credit Loss Expense á Higher costs of $4.7 million due to an increase in aged receivables Other á Higher stock-based compensation, salaries expense, and bonus achievement Restructuring Charges Restructuring charges recorded as operating expenses in our consolidated statements of operations represent costs associated with separate individual restructuring plans implemented in various fiscal periods. The extent of our costs arising as a result of these actions, including fluctuations in related balances between fiscal periods, is based on the nature of activities under the various plans. Fiscal Year Ended Change September 26, 2025 September 27, 2024 $ % Restructuring charges $15,007 $6,384 $8,623 135% Percentage of total revenue 1% 1% Fiscal 2025 Restructuring Events In September 2025, we initiated restructuring actions in order to centralize teams into fewer locations to provide better access to talent pools, encourage multi-disciplinary collaboration, and simplify operations. In connection with this plan, we recorded expense in fiscal 2025 of $6.1 million in severance and other related benefits. The remaining components of this plan are expected to be completed by the end of the second quarter of fiscal 2026, resulting in an additional charge of approximately $10 million in severance and other termination benefits. Cash payment of the severance and other termination benefits are expected to be substantially completed by the end of the first quarter of fiscal 2026. These activities are expected to result in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2026, due to estimated savings in compensation and benefits of impacted employees. The impact of these estimated savings on our operating expenses will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. In November 2024, we initiated restructuring actions with the purpose of aligning our R&D resources, and to a lesser extent our S&M resources, with our highest strategic priorities. In connection with this plan, we recorded expense in fiscal 2025 of $9.2 million in severance and other related benefits. The remaining components of this plan were substantially completed by the end of fiscal 2025. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2025. These activities resulted in estimated gross pre-tax operating income savings of approximately $20 million in fiscal 2025, due to estimated savings in compensation and benefits of impacted employees, which was consistent with our expectations. The impact of these estimated savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. Fiscal 2024 Restructuring Events In April 2024, we initiated restructuring actions with the purpose of focusing our resources on our highest strategic priorities. In connection with this plan, we recorded an expense in fiscal 2024 of $4.6 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $3 million in fiscal 2024 and resulted in savings of approximately $11 million within fiscal 2025, which was consistent with our expectations. The impact of these estimated savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. Fiscal 2023 Restructuring Events In September 2023, we initiated a restructuring plan with the purpose of focusing our resources on our highest strategic priorities. In continuation with this plan, we recorded an expense in fiscal 2024 of $7.4 million in severance and other related benefits. Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $40 million within fiscal 2024, which was consistent with our expectations. The impact of these savings on our operating expenses was offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. 42 Table of Contents In June 2023, we implemented a focused restructuring plan, primarily consisting of workforce reductions and facility consolidations to improve execution in alignment with our strategy and to reduce our cost structure through improved utilization of our global infrastructure. Actions and expenses related to this plan were substantially completed by the end of fiscal 2024. These activities resulted in gross pre-tax operating income savings of approximately $20 million in fiscal 2024, which was consistent with our expectations. The impact of these savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. For additional information on our Restructuring programs, see Note 13 "Restructuring" to our consolidated financial statements. Other Income/Expense Other income/expense primarily consists of interest income earned on cash and investments and the net gains or losses from foreign currency transactions, derivative instruments, our proportionate share of net income or losses from our equity method investments, and gains and losses on the sales of marketable securities from our investment portfolio. Fiscal Year Ended Change Other income/(expense) September 26, 2025 September 27, 2024 $ % Interest income/(expense), net $15,376 $34,077 $(18,701) (55)% Other income, net 23,150 20,076 3,074 15% Total $38,526 $54,153 $(15,627) (29)% Category Key Drivers Interest Income â Lower yields on invested cash balances Other Income á Higher income from our equity method investments in the current year Income Taxes Our effective tax rate is based on our fiscal year results and is affected each period end by several factors. These include differences from projected fiscal year results, changes to tax rates, the relative mix of income earned in our domestic and foreign jurisdictions, as well as discrete items such as changes to our uncertain tax benefits that may occur but are not necessarily consistent between periods. For additional information related to effective tax rates, see Note 12 "Income Taxes" to our consolidated financial statements. Fiscal Year Ended September 26, 2025 September 27, 2024 Provision for income taxes (in thousands) $(46,993) $(48,163) Effective tax rate 15% 15% Factor Impact On Effective Tax Rate Tax Contingencies â Higher benefit from the expiration of the statute of limitations Research and Development â Higher benefit from R&D tax credits Foreign Operations á Lower benefit from foreign earned income Stock-based Compensation á Lower benefit related to the settlement of stock-based awards. Tax Cuts and Jobs Act of 2017 á Prior year benefit related to lower Transition Tax liability under the Tax Cuts and Jobs Act of 2017 ("Transition Tax") resulting from recent Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner 43 Table of Contents LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION Our principal sources of liquidity are cash, cash equivalents, and investments, as well as cash flows from operations. We also have additional access to liquidity under a revolving credit facility, as noted in our Current Report on Form 8-K filed with the SEC on November 19, 2024. We believe that these sources will be sufficient to satisfy our currently anticipated cash requirements through at least the next twelve months. As of September 26, 2025, we had cash and cash equivalents of $701.9 million, which consisted of cash and highly liquid money market funds. In addition, we had short and long-term investments of $80.9 million, which primarily consisted of equity method investments and equity securities without a readily determinable value. The following table presents selected financial information as of September 26, 2025 and September 27, 2024 (in thousands): September 26, 2025 September 27, 2024 Cash and cash equivalents $ 701,893  $ 482,047  Short-term investments 703  —  Long-term investments 80,205  89,267  Accounts receivable, net 331,096  315,465  Accounts payable and accrued liabilities 387,096  364,909  Working capital 950,471  776,581  Capital Expenditures and Uses of Capital Our capital expenditures consist of purchases of land, building, building fixtures, laboratory equipment, office equipment, computer hardware and software, leasehold improvements, and production and test equipment. Additionally, included in capital expenditures are amounts associated with Dolby Cinema locations. We continue to invest in S&M and R&D to promote the overall growth of our business and technological innovation. We continue to retain sufficient cash holdings to support our operations and we also have historically purchased investment-grade securities diversified among security types, industries, and issuers. We have used cash generated from our operations to fund a variety of activities related to our business in addition to our ongoing operations, including business expansion and growth, acquisitions, and repurchases of our Class A common stock. We have historically generated significant cash from operations. However, these cash flows and the value of our investment portfolio could be affected by various risks and uncertainties, as described in Part I, Item 1A "Risk Factors." Shareholder Return We have returned cash to stockholders through both repurchases of Class A common stock under our repurchase program initiated in fiscal 2010 and our quarterly dividend program initiated in fiscal 2015. Refer to Note 9 "Stockholders' Equity and Stock-Based Compensation" to our consolidated financial statements for a summary of dividend payments made under the program during fiscal 2025 and additional information regarding our stock repurchase program. Stock Repurchase Program. Our stock repurchase program was originally approved in fiscal 2010, and since then we have completed approximately $3.0 billion of stock repurchases under the program. Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. For fiscal 2025, quarterly dividends of $0.33 per share were paid on our Class A and Class B common stock to eligible stockholders of record. On November 18, 2025, we announced a dividend in the amount of $0.36 per share, payable on December 10, 2025, to stockholders of record as of the close of business on December 2, 2025. Cash Flows Analysis For the following comparative analysis performed for each of the sections of the consolidated statements of cash flows, the significant factors identified as the leading drivers contributing to the fluctuation are presented in descending order of their impact relative to the overall change (in thousands). 44 Table of Contents Operating Activities Fiscal Year Ended September 26, 2025 September 27, 2024 Net cash provided by operating activities $ 472,198  $ 327,252  Net cash provided by operating activities increased $144.9 million in fiscal 2025 compared to fiscal 2024, primarily due to the following: Factor Impact On Cash Flows Operating assets and liabilities á Higher inflows due to higher accounts payable and accrued liabilities, lower contract assets, and lower prepaids and other assets, offset by lower income taxes payable Investing Activities Fiscal Year Ended September 26, 2025 September 27, 2024 Net cash used in investing activities $ (10,586) $ (286,292) Net cash used in investing activities was $275.7 million lower in fiscal 2025 compared to fiscal 2024, primarily due to the following: Factor Impact On Cash Flows Business Combinations á Lower outflows due to business combinations in the prior year Proceeds from Investments â Lower inflows from the sale and maturity of marketable investment securities Purchase of Investments á Lower outflows for the purchase of marketable investment securities Financing Activities Fiscal Year Ended September 26, 2025 September 27, 2024 Net cash used in financing activities $ (247,238) $ (287,814) Net cash used in financing activities was $40.6 million lower in fiscal 2025 compared to fiscal 2024, primarily due to the following: Factor Impact On Cash Flows Share Repurchases á Lower outflows due to lower common stock repurchases Dividend Payments â Higher outflows for the payment of our quarterly cash dividend to common stockholders primarily as a result of a $0.03 per share increase compared to the prior fiscal year Purchase of non-controlling interest in business combination á Lower outflows related to acquiring a portion of the noncontrolling interest in our consolidated subsidiary in the prior fiscal year Contractual Obligations and Commitments Naming Rights We are party to agreements for naming rights of certain facilities, most significantly for naming rights and related benefits with respect to the Dolby Theatre in Hollywood, California, the location of the Academy Awards®. The term of the agreement is 20 years, over which we will make payments on a semi-annual basis until fiscal 2032. We also hold the naming rights to Dolby Live at the Park MGM in Las Vegas, Nevada. Dolby Live is a fully integrated performance venue offering live concerts in Dolby Atmos. As of September 26, 2025, we had $66.3 million remaining to be paid under agreements, with $13.5 million due during fiscal 2026. For additional details regarding our naming rights commitments, see Note 14 "Commitments and Contingencies" to our consolidated financial statements. Operating Leases Operating lease payments represent our commitments for future minimum rent made under non-cancelable leases for office space, including those payable to our principal stockholder and portions attributable to the noncontrolling interests in our wholly-owned and majority-owned subsidiaries. For additional details regarding our leases, see Note 7 "Leases" to our consolidated financial statements. 45 Table of Contents Purchase Obligations Purchase obligations primarily consist of our non-cancelable commitments made under agreements to purchase goods and services related to Dolby Cinema and related to information technology and telecommunications, marketing and professional services, and manufacturing and other R&D activities. As of September 26, 2025, we had $126.7 million remaining on these commitments, with $36.9 million due during fiscal 2026. Donation Commitments Our donation commitments relate to non-cancelable obligations that consist of maintenance services and installation of audio and imaging products in exchange for various marketing, branding, and publicity benefits. As of September 26, 2025, we had $1.2 million remaining under these commitments, with $0.2 million due during fiscal 2026. For additional details regarding our donation commitments, see Note 14 "Commitments and Contingencies" to our consolidated financial statements. Unrecognized Tax Benefits As of September 26, 2025, we had an accrued liability for unrecognized tax benefits without interest, penalties, and related deferred tax assets, totaling $83.7 million. We are unable to estimate when any cash settlement with a taxing authority might occur. Indemnification Clauses We are party to certain contractual agreements under which we have agreed to provide indemnification of varying scope and duration to the other party relating to our licensed IP. Since the terms and conditions of the indemnification clauses do not explicitly specify our obligations, we are unable to reasonably estimate the maximum potential exposure for which we could be liable. In addition, we have entered into indemnification agreements with our officers, directors, and certain employees, and our certificate of incorporation and bylaws contain similar indemnification obligations. For additional details regarding indemnification clauses within our contractual agreements, see Note 14 "Commitments and Contingencies" to our consolidated financial statements. In fiscal 2025, there have been no material changes in either our off-balance sheet financing arrangements or contractual obligations outside the ordinary course of business, and we did not enter into any off-balance sheet arrangements that are expected to have a material effect on Dolby's liquidity or the availability of capital resources.