Dolby's (DLB) Q4 Earnings & Revenues Beat Estimates, Up Y/Y

DLB BMI FLEX GWRE

Dolby Laboratories, Inc (DLB - Free Report) reported fourth-quarter fiscal 2023 results, with non-GAAP earnings per share (EPS) of 65 cents compared with 54 cents reported in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 52 cents.

Total revenues were $290.6 million, up from $278.2 million in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate by 1.46%. The uptick was caused by increased adoption of Dolby Atmos and Dolby Vision.

The company announced a dividend of 30 cents per share, payable on Dec 5, to shareholders of record on Nov 28, 2023.

Segmental Performance

Revenues from Licensing were $265.2 million, up from $249.1 million reported in the prior-year quarter. Products and Services’ revenues were $25.3 million compared with $29.1 million reported in the year-ago quarter.

Broadcast Licensing contributed 39% to the total licensing revenues in the fiscal fourth quarter. Mobile Licensing accounted for 14%, Consumer Electronics 16%, PC Licensing 10% and Licensing from Other Markets contributed 22% to licensing revenues.

Other Details

Gross profit in the fiscal fourth quarter was $255.1 million compared with $241.1 million in the year-ago quarter. Total operating expenses increased to $258.5 million from $213.9 million reported in the year-ago quarter.

Operating loss was $3.5 million against the operating income of $27.1 million in the year-ago quarter.

In the fiscal fourth quarter, the company repurchased 0.3 million of its common shares and ended the quarter with $212 million of stock repurchase authorization.

Cash Flow and Liquidity

In the fiscal fourth quarter, Dolby generated $85 million of net cash from operating activities compared with $51.3 million in the prior-year period.

As of Sep 29, 2023, the company had $745.4 million in cash and cash equivalents, with $607.6 million in total liabilities.

2024 Guidance

For the first quarter of fiscal 2024, the company expects GAAP EPS of 44-59 cents and non-GAAP EPS of 80-95 cents on revenues of $300-$330 million.

On a GAAP basis, operating expenses are expected to be in the range of $220-$230 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be between $180 million and $190 million.

For fiscal 2024, the company expects revenues to be $1.30 billion. GAAP operating margin is expected to be 20%, while the non-GAAP operating margin is expected to be nearly 32%.

On a GAAP basis, operating expenses are expected to be between $885 million and $895 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be in the range of $740-$750 million. The company expects GAAP EPS of $2.30-$2.45 and non-GAAP EPS of $3.60-$3.75.

Zacks Rank & Stocks to Consider

Dolby currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are Guidewire Software (GWRE - Free Report) , Flex (FLEX - Free Report) and Badger Meter (BMI - Free Report) . Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Guidewire Software’s fiscal 2024 EPS has increased 10.5% in the past 60 days to 74 cents. Shares of GWRE have soared 47.1% in the past year.

The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 29.5% in the past year.

The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.

Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 24.6% in the past year.

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