Dolby Laboratories, Inc. (NYSE:DLB) Q4 2019 Earnings Conference Call - Final Transcript

Nov 14, 2019 • 05:00 pm ET


Dolby Laboratories, Inc. (NYSE:DLB) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing Fiscal Fourth Quarter and Fiscal 2019 Results. [Operator Instructions] As a reminder, this call is being recorded, Thursday, November 14, 2019.

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

Jason Dea

Good afternoon. Welcome to Dolby Laboratories fourth 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 in our most recent report on Form 10-Q. 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 information 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 a recap of Dolby's financial results and provide our fiscal 2020 outlook, and Kevin will finish with a discussion of the business.

So with that introduction behind us. I will now turn the call to Lewis.

Lewis Chew

Okay. Thank you, Jason, and good afternoon everyone. As a reminder, we adopted ASC 606 the new revenue accounting standard at the beginning of this year and we used the full retrospective method and that required us to recast previous year's revenue. So within our earnings release is a table that shows the FY '18 quarterly revenue figures as adjusted under 606, and is the same table that we published last quarter. So any prior year revenue numbers I refer to in my commentary are those recasted number under 606. So, let's go through the Q4 results.

In the fourth quarter of fiscal '19 total revenue was $299 million compared to $302 million in Q3, and $241 million in last year's Q4. Licensing revenue for the quarter was $265 million, while products and services revenue was $34 million, both of those were in line with the guidance that we gave at the beginning of the quarter.

Here's my commentary by end-markets. Broadcast represented about 44% of total licensing in the fourth quarter. Broadcast revenues were up about 14% year-over-year and that was driven by higher recoveries and on a sequential basis, however, broadcast revenues were down about 12% as recoveries were lower than they were in Q3.

Mobile devices represented approximately 17% of total licensing in the fourth quarter and Q4 is a difficult quarter to