Dolby Laboratories, Inc. (NYSE:DLB) Q1 2019 Earnings Conference Call Transcript

Jan 30, 2019 • 05:00 pm ET


Dolby Laboratories, Inc. (NYSE:DLB) Q1 2019 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing Fiscal First Quarter Results. During the presentation all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded, Wednesday, January 30th, 2019.

I would now like to turn the conference call over to Elena Carr, Director of Investor Relations for Dolby Laboratories. Please go ahead, Elena.

Elena Carr

Good afternoon. Welcome to Dolby Laboratories First Quarter 2019 earnings conference call. Joining me today are Kevin Yeaman, Dolby Laboratories' President and CEO; and Lewis Chew, Executive Vice President and Chief Financial Officer.

As a reminder, today's discussion will include forward-looking statements. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today. A discussion of some of these risks and uncertainties can be found in the earnings press release that we issued today under the section captioned Risk Factors as well as on our most recent Form 10-K.

Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events.

During today's call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings press release and in the Dolby Laboratories Investor Relations data sheet on the Investor Relations section of our website.

As for the content of today's call, Lewis will begin with the recap of our results and provide our outlook for 2019, and Kevin will finish with a discussion of the business.

So I will now turn it over to Lewis.

Lewis Chew

Okay. Good afternoon, everybody, and thank you for joining our first quarter call. As quick reminder from some comments I made last earnings call last quarter, the new revenue accounting standard formally referred to as 606 i.e. ASC 606 became effective for us at the beginning of the year, and we adopted that new standard using the full retrospective method and that required us to recast prior year's revenue by applying these new rules retrospectively.

So, during my comments today, any comparisons I make to prior year revenue numbers are in reference to those 606 recasted numbers. And in the earnings release that we put out today, we included a table that shows FY'18 revenue as adjusted under 606 by quarter. So, hopefully that will be helpful.

So, here are the Q1 results, in the first quarter of FY'19, total revenue was $302 million. Within that, licensing revenue was $260 million, which was in line with our expectations, while products and services was $42 million, which was a little above the projection we had for the quarter.

Total revenue in Q1 of last year was $300 million and that included a large recovery of more than $20 million in mobile licensing that did not repeat in this year's Q1. So, let's review the trends that