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

Nov 14, 2019 • 05:00 pm ET

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

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Q & A
Executive
Lewis Chew

completed was the first year that we truly operated and reported under 606. We recasted '18 and '17 so that it could be a comparison point. So that means that I believe fiscal '20 the guidance we're giving versus fiscal '19 is a fair comparison, both not only accounted for under 606 but sort of think of it as the company operating under 606 as opposed to backwards applying new rules.

Analyst
Ralph Schackart

Okay. I know you can't go back in time, kind of readjust to get a different prior year comparison. But let me ask just a different question. In Q1, just the guide, I think it was lower than expected at least relative to the Street. I know timing could be a factor and sometimes it's tough to line up your quarters. But anything you'd call out in Q1 on the top line specifically?

Executive
Kevin Yeaman

Yes. Those things are not lost on us. We did look at sort of the pattern of the year by quarter that was out there, let's say on published on consensus versus ours and the first thing I'd point out is our Q1 '19 to Q1 '20 pattern isn't actually that different than the '18 to '19 pattern. I think you know the FY '20 consensus number where probably set of numbers that had to make a lot of broad assumptions as Lewis speak -- hard to speak to a number we weren't responsible for. I don't think there's anything corky other than the shape of our revenue will show probably a bigger spike in Q2 that maybe some of that was expected in Q1, but there is nothing in particular about the way we run our business that's driving anything differently. Also last year in FY '19 under 606 in Q1, we did have some extra revenue that came from hybrid deals in the Dolby Cinema space, which was sort of lumpy because, those are not the larger part of our business there and we actually didn't have any more of those as the year progressed. And so that also creates a little bit of a hitch in terms of the comparisons. So if you isolate for that, that's also causing some of the noise.

But other than that I think when we look at the whole year, I think right now our whole year guidance is a range of $1,300 million to $1,350 million with a midpoint of $1,325 million or $1,325 million, and that's not that far off from where the Street was and a lot of that differences will be landing in Q1. And for the rest of the year and totality that sort of lines up.

And in terms of our new seasonality, I think even last year we are signaling that Q2 is not an uncommon quarter for us to see a little bit of a surge in revenue, just from the pattern of our activities and the way our customer activities work.

Analyst
Ralph Schackart

Great. And then sometimes I know from