10q10k10q10k.net

What changed in Dolby Laboratories, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Dolby Laboratories, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+310 added−304 removedSource: 10-K (2025-11-18) vs 10-K (2024-11-19)

Top changes in Dolby Laboratories, Inc.'s 2025 10-K

310 paragraphs added · 304 removed · 244 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

39 edited+4 added−5 removed63 unchanged
Biggest changeWe actively pursue new applications to expand our patent portfolio to address new technological innovations, and we also make strategic acquisitions of technology and patents from time to time. We have multiple patents covering aspects and improvements for many of our technologies. We have approximately 1,500 trademark registrations throughout the world for a variety of wordmarks, logos, and slogans.
Biggest change" We have approximately 1,500 trademark registrations throughout the world for a variety of wordmarks, logos, and slogans. Our trademarks cover our various products, technologies, improvements, and features, as well as the services that we provide.
We operate as licensors in patent pools administered by several patent pool administrators including Access Advance, Sisvel, Via Licensing Alliance LLC ("Via LA") and Vectis. We are a majority stockholder and licensor in Via LA, which we co-own with Philips and Mitsubishi. We hold a minority ownership interest in Access Advance.
We operate as licensors in patent pools administered by several patent pool administrators including Access Advance LLC ("Access Advance"), Sisvel, Via Licensing Alliance LLC ("Via LA") and Vectis. We are a majority stockholder and licensor in Via LA, which we co-own with Philips and Mitsubishi. We hold a minority ownership interest in Access Advance.
These are annual and sometimes multiyear deals, where the value of the committed volume is generally recognized as revenue up front. These contract structures, as well as the occasional fixed fee contract whereby a licensee pays for unlimited units, are often selected by large customers and can also lead to variability in quarterly revenues.
These are annual and sometimes multiyear deals, where the value of the committed volume is generally recognized as revenue up front. These contract structures, as well as the occasional fixed fee contract whereby a licensee pays for unlimited units, are often selected by large customers and can also lead to variability in quarterly revenue.
Our researchers work on every stage in the product development cycle because the end markets we serve are constantly evolving to take advantage latest innovations, and keeping our offerings on the cutting edge helps us keep our partnerships strong and productive.
Our researchers work on every stage in the product development cycle because the end markets we serve are constantly evolving to take advantage of the latest innovations, and keeping our offerings on the cutting edge helps us keep our partnerships strong and productive.
Dolby is synonymous with high quality entertainment from a consumer perspective and has become critical to makers of consumer electronic devices as our technology is an important component of the creation and delivery of audio and video content.
Dolby is synonymous with high-quality entertainment from a consumer perspective and has become critical to makers of consumer electronic devices as our technology is an important component in the creation and delivery of audio and video content.
Within the Results of Operations section of Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations ," revenue attributable to previous periods' usage including settlements are collectively referred to as "recoveries." Recoveries are a reoccurring element of our business and are subject to fluctuation and unpredictability.
Within the Results of Operations section of Part II, Item 7 " Management's Discussion and Analysis of Financial Condition and Results of Operations ", revenue attributable to previous periods' usage including settlements are collectively referred to as "recoveries." Recoveries are a recurring element of our business and are subject to fluctuation and unpredictability.
Dolby Cinema We leverage our universe of creative talent to bring the highest quality experiences to our exhibitor partners. Dolby Cinemas are Premium Large Format (PLF) cinemas that deliver a Dolby branded premium cinema offering with Dolby Vision, Dolby Atmos, and a proprietary Dolby theater design.
Dolby Cinema We leverage our universe of creative talent to bring the highest quality experiences to our exhibitor partners. Dolby Cinemas are PLF cinemas that deliver a Dolby branded premium cinema offering with Dolby Vision, Dolby Atmos, and a proprietary Dolby theater design.
Patent pools employ a variety of licensing revenue models, including per-unit and fixed-fee royalties, and sometimes include royalty caps or committed volume commitments in exchange for a lower price per unit.
Patent pools employ a variety of licensing revenue models, including per-unit and fixed-fee royalties, and sometimes include royalty caps or committed volume arrangements in exchange for a lower price per unit.
We price our products based on value and volume, among other factors. With respect to value, the advanced features of Dolby Atmos and Dolby Vision enhance the audio and video capabilities of our CE OEM partners' products and many of those partners can charge a premium for devices that include these technologies.
We price our products based on value and volume, among other factors. With respect to value, the advanced features of Dolby Atmos and Dolby Vision enhance the audio and video capabilities of our consumer electronics OEM partners' products and many of those partners can charge a premium for devices that include these technologies.
We also provide PCS for products sold and equipment installed at Dolby 8 Table of Contents Cinema theaters operated by exhibitor partners and support the implementation of our technologies into products manufactured by our licensees. Revenue Generation We generate revenue from Dolby Cinema Products by selling and leasing products to exhibitors, excluding Dolby Cinemas, and offering PCS to exhibitors .
We also provide PCS for products sold and equipment installed at Dolby Cinema theaters operated by exhibitor partners, and we support the implementation of our technologies into products manufactured by our licensees. Revenue Generation We generate revenue from Dolby Cinema Products by selling and leasing products to exhibitors, excluding Dolby Cinemas, and offering PCS to exhibitors .
There can be dozens of licensors contributing IP to a patent pool for a standardized technology. 7 Table of Contents By bringing together multiple patent owners to offer a combined solution, pools offer a number of advantages over direct licensing, including the following: • Pools dramatically decrease transaction costs for most licensees and, to a lesser extent, for most licensors; • Pools offer licensees relatively simple access to fundamental technology in a simplified ‘one-stop shop,’ enabling licensees to focus their resources on developing their own products and technologies; • Pools enable widespread, rapid adoption of a technology, which accelerates research into subsequent technologies and catalyzes downstream competition; • Pools allow licensors like Dolby to focus on innovation rather than sales, marketing, and licensing activities; and • The pool structure naturally leads to more transparent and consistent licensing terms.
By bringing together multiple patent owners to offer a combined solution, pools offer a number of advantages over direct licensing, including the following: • Pools dramatically decrease transaction costs for most licensees and, to a lesser extent, for most licensors; 7 Table of Contents • Pools offer licensees relatively simple access to fundamental technology in a simplified ‘one-stop shop,’ enabling licensees to focus their resources on developing their own products and technologies; • Pools enable widespread, rapid adoption of a technology, which accelerates research into subsequent technologies and catalyzes downstream competition; • Pools allow licensors like Dolby to focus on innovation rather than sales, marketing, and licensing activities; and • The pool structure naturally leads to more transparent and consistent licensing terms.
PRODUCTS & SERVICES We design and manufacture audio, imaging, accessibility, and other hardware and software solutions primarily for the cinema, with occasional applications in the television, broadcast, and live entertainment industries. Cinema Imaging Products include digital cinema servers used to load, store, decrypt, decode, watermark and playback digital film files for presentation on cinema projectors.
Products and Services Cinema Products and Services We design and manufacture audio, imaging, accessibility, and other hardware and software solutions primarily for the cinema, with occasional applications in the television, broadcast, and live entertainment industries. 8 Table of Contents Cinema Imaging Products include digital cinema servers used to load, store, decrypt, decode, watermark and playback digital film files for presentation on cinema projectors.
Fiscal Year Ended Revenue September 27, 2024 September 29, 2023 September 30, 2022 Licensing 93% 92% 93% Products and services 7% 8% 7% Total 100% 100% 100% 4 Table of Contents 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.
Fiscal Year Ended Revenue September 26, 2025 September 27, 2024 September 29, 2023 Licensing 93% 93% 92% Products and services 7% 7% 8% Total 100% 100% 100% 4 Table of Contents Licensing The two primary components of our licensing business are Branded Technologies which include Branded Audio Codecs, Dolby Atmos, and Dolby Vision, and Patents, which include Audio Patents and Imaging Patents.
END MARKETS We generated 93% of our revenues in fiscal 2024 by licensing technology, our brand, and patents, primarily to device manufacturers.
END MARKETS We generated 93% of our revenues in fiscal 2025 by licensing technology, brand, and patents, primarily to device manufacturers.
The following table presents the end market composition of revenue from our licensing business for all periods presented: Fiscal Year Ended Market September 27, 2024 September 29, 2023 September 30, 2022 Main Components of Each Category Broadcast 35% 38% 37% Televisions and STBs Mobile 20% 20% 21% Smartphones and Tablets CE 14% 14% 16% DMAs, Blu-ray Disc devices, AVRs, Soundbars, and DVDs PC 12% 10% 13% Windows and macOS operating systems and devices Other 19% 18% 13% Dolby Cinema, Gaming consoles, Automotive, and Patent pool administrative fees Total 100% 100% 100% INTELLECTUAL PROPERTY Our base of IP assets includes patents, trademarks, copyrights, and trade secrets developed based on our technical expertise.
The following table presents the end market composition of revenue from our licensing business for all periods presented: 9 Table of Contents Fiscal Year Ended Market September 26, 2025 September 27, 2024 September 29, 2023 Main Components of Each Category Broadcast 34% 35% 38% Televisions and STBs Mobile 22% 20% 20% Smartphones and Tablets CE 12% 14% 14% DMAs, Blu-ray Disc devices, AVRs, Soundbars, and DVDs PC 12% 12% 10% Windows and macOS operating systems and devices Other 20% 19% 18% Dolby Cinema, Gaming consoles, Automotive, and Patent pool administrative fees Total 100% 100% 100% INTELLECTUAL PROPERTY Our base of IP assets includes patents, trademarks, copyrights, and trade secrets developed based on our technical expertise.
As of September 27, 2024, we had 2,080 employees worldwide, of whom 1,018 employees were based outside of the U.S. None of our employees are subject to a collective bargaining agreement. Compensation and Benefits We offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages in each of our locations around the globe.
As of September 26, 2025, we had 2,051 employees worldwide, of whom 1,020 employees were based outside of the U.S. None of our employees are subject to a collective bargaining agreement. Compensation and Benefits We offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages in each of our locations around the globe.
Dolby.io leverages Dolby’s six decades of experience in the science of sight and sound to deliver 4K video with clarity, depth and detail via our unique content delivery architecture that ensures a high quality, synchronized viewer experience across the globe.
Dolby OptiView leverages Dolby’s six decades of experience in the science of sight and sound to deliver video with clarity, depth and detail via our unique content delivery system which ensures a high quality, synchronized viewer experience across the globe.
Looking forward, Dolby intends to continue to actively participate (both in standards bodies and independently) in the development of next-generation standardized audio and video technologies, and has begun in particular to explore the use of artificial intelligence in the development and use of audio and video codecs.
Looking forward, Dolby intends to continue to actively participate (both in standards bodies and independently) in the development of next-generation standardized audio and video technologies and, in particular, we are exploring the use of artificial intelligence in the development and use of audio and video codecs.
We generated over 90% of our revenue in fiscal 2024 by licensing branded technology and patents that enable 1,000 electronic device manufacturers to enhance the audio and visual capabilities of their products by incorporating our technology.
We generated over 90% of our revenue in fiscal 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.
ITEM 1. BUSINESS OVERVIEW Founded in 1965, Dolby Laboratories is in the business of improving the entertainment experience by inventing and innovating technology that advances audio and video. 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.
ITEM 1. BUSINESS 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.
Dolby.io Dolby.io is powering the next generation of immersive, interactive, and social experiences with real-time engagement for live events, especially sports.
Dolby OptiView Dolby OptiView (previously named Dolby.io) is powering immersive, interactive, and social experiences with real-time engagement for live events, especially sports.
For example, in 2023, there were over one billion mobile devices, 200 million TVs and 90 million cars sold according to Wards Intelligence, an Auto Research firm.
For example, in 2024, there were over one billion mobile devices, approximately 200 million TVs and, according to Wards Intelligence, an Auto Research firm, approximately 90 million cars sold. Accordingly, ARPU for cars is higher than ARPU for TVs, which is higher than ARPU for mobile phones.
This enables our customers to engage viewers effectively with near real time interaction tools that will strengthen connections and drive participation. Revenue Generation Dolby.io represents a departure from our traditional distribution model which is focused on device manufacturers. Dolby.io is a software as a service (SaaS) product sold directly to enterprises via a consumption revenue model.
This enables our customers to engage viewers effectively with near real time interaction tools that will strengthen connections and drive participation. Revenue Generation Dolby OptiView is a software as a service (SaaS) product licensed directly to enterprises via a consumption-based revenue model.
From time to time, we also generate revenue via recoveries (“recoveries”), which is revenue attributable to unlicensed or under reported distribution of devices incorporating our technologies in prior periods, usually recovered as a part of a settlement.
Recoveries We also generate licensing revenue via recoveries, which is revenue attributable to unlicensed or under-reported distribution of products incorporating our technologies in prior periods.
Our trademarks cover our various products, technologies, improvements, and features, as well as the services that we provide. These trademarks are an integral part of our technology licensing program, and licensees typically elect to place our trademarks on their products to inform consumers that their products incorporate our technology and meet our quality specifications.
These trademarks are an integral part of our technology licensing program, and licensees typically elect to place our trademarks on their products to inform consumers that their products incorporate our technology and meet our quality specifications. We protect our IP rights both domestically and internationally.
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. It is also able to carry channel-based configurations. • Dolby AC-4.
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 uses cutting edge compression to deliver equivalent experiences at half the bitrate of DD+, its predecessor.
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 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 AC-4 is an audio codec that uses cutting edge compression to deliver 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 for headphone or speaker playback. It is also capable of delivering enhanced, user-configurable, and accessible experiences.
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.
These technologies are fundamental to the capture, storage, transmission and playback of audio and video, and are embodied in billions of products sold each year throughout the world, including streaming devices, televisions, gaming consoles, automotive media consoles and security cameras.
These technologies are fundamental to the capture, storage, transmission and playback of audio and video, and are embodied in billions of products sold each year throughout the world, including streaming devices, televisions, gaming consoles, automotive media consoles and security cameras. 6 Table of Contents Technology Standards The standardized technologies at the core of our patent licenses are generally developed in an open, collaborative process under the auspices of international standard-setting organizations like ETSI, ISO, IEC and/or ITU.
Accordingly, ARPU for cars is higher than ARPU for TVS, which is higher than ARPU for mobile phones. 6 Table of Contents Patent Licensing We generate patent licensing revenue primarily from licensing Dolby-owned patents essential to standardized audio and video technologies.
Patent Licensing We generate patent licensing revenue primarily from licensing Dolby-owned patents essential to standardized audio and video technologies.
The goal of our research teams is to maintain leadership in all our current markets while simultaneously inventing new experiences.
A significant portion of the R&D budget is dedicated to forward looking research because innovation is a core and critical function at Dolby. The goal of our research teams is to maintain leadership in all our current markets while simultaneously inventing new experiences.
We have transitioned a number of our DD licensees to DD+ technologies, an extension of our DD technologies, whose patents generally expire later than the DD patents. We pursue a general practice of filing patent applications for our technologies in the United States and foreign countries where our customers manufacture, distribute, or sell licensed products.
We pursue a general practice of filing patent applications for our technologies in the United States and foreign countries where our customers manufacture, distribute, or sell licensed products. We actively pursue new applications to expand our patent portfolio to address new technological innovations, and we also make strategic acquisitions of technology and patents from time to time.
This IP generates licensing revenue that enables us to fund and pursue further innovation. Most of our R&D resources are focused on audio and video technologies for consumer entertainment. A significant portion of the R&D budget is dedicated to forward looking research because innovation is a core and critical function at Dolby.
RESEARCH AND DEVELOPMENT We conduct R&D activities at numerous locations in the U.S. and internationally. Dolby’s history of innovation has resulted in many forms of IP. This IP generates licensing revenue that enables us to fund and pursue further innovation. Most of our R&D resources are focused on audio and video technologies for consumer entertainment.
For audio and video codecs, the standardization process is centered on creating interoperable solutions that work in a uniform manner despite increasingly complex device requirements. The resulting standardized technologies are intended to connect billions of disparate devices worldwide in a way that allows for seamless communication.
Given the collaborative and meritocratic nature of the standardization process, the resulting technology solution is both state-of-the-art and designed to meet the requirements of the market, increasing the likelihood of industry adoption. For audio and video codecs, the standardization process is centered on creating interoperable solutions that work in a uniform manner despite increasingly complex device requirements.
These technology standards have played an essential role in advancing the technology of media capture, storage, transmission and playback through multiple generations of technological development. For example, the AVC codec helped enable standard-definition streaming over the internet, while the next-generation HEVC codec optimized streaming for higher-definition formats like 4K.
For example, the AVC codec helped enable standard-definition streaming over the internet, while the next-generation HEVC codec optimized streaming for higher-definition formats like 4K.
We protect our IP rights both domestically and internationally. From time to time, OEMs have failed to report or have underreported shipments of their products that incorporate our technologies. We have experienced implementation licensees selling ICs with our technologies to third parties that are not system licensees. We anticipate that such problems will continue to occur.
From time to time, OEMs have failed to report or have underreported shipments of their products that incorporate our technologies. We anticipate that such issues will continue to occur. Accordingly, we have taken steps in the past to enforce our IP rights and expect to continue doing so in the future.
Participants, including Dolby, contribute specialized expertise and/or technology with the goal of creating common industry solutions to address technical challenges. Given the collaborative and meritocratic nature of the standardization process, the resulting technology solution is both state-of-the-art and designed to meet the requirements of the market, increasing the likelihood of industry adoption.
Active participants are leaders in the field, and often include businesses (large and small), research institutes, and universities. Participants, including Dolby, contribute specialized expertise and/or technology with the goal of creating common industry solutions to address technical challenges.
As of September 27, 2024, we had approximately 27,400 issued and effective patents and approximately 5,900 9 Table of Contents pending patent applications in more than 100 jurisdictions throughout the world, which includes patents and patent applications acquired in connection with our acquisition of GE Licensing (as defined below) and THEO Technologies ("THEO"), described in more detail in Note 15 " Business Combinations " to our consolidated financial statements.
As of September 26, 2025, we had approximately 28,400 issued and effective patents and approximately 6,100 pending patent applications in more than 200 jurisdictions throughout the world. In fiscal 2025, we were issued 4,179 new patents.
Our currently issued patents expire at various times through December 2047. Some of our patents relating to DD technologies have expired, and others will expire over the next several years.
We have multiple patents covering aspects and improvements for many of our technologies. Our issued patents expire at various times, ranging from 2025 through 2047.
Removed
Technology Standards The standardized technologies at the core of our patent licenses are generally developed in an open, collaborative process under the auspices of international standard-setting organizations like ETSI, ISO, IEC and/or ITU. Active participants are leaders in the field, and often include businesses (large and small), research institutes, and universities.
Added
The resulting standardized technologies are intended to connect billions of disparate devices worldwide in a way that allows for seamless communication. These technology standards have played an essential role in advancing the technology of media capture, storage, transmission and playback through multiple generations of technological development.
Removed
While in the past we derived a significant portion of our licensing revenue from our DD technologies, this is no longer the case as revenue attributed to DD technologies has declined and is expected to continue to decline. The primary end products where DD is widely used include automobiles, TVs, and soundbars.
Added
There can be dozens of licensors contributing IP to a patent pool for a standardized technology.
Removed
Accordingly, we have taken steps in the past to enforce our IP rights and expect to continue doing so in the future. Moreover, in certain countries, we have relatively few or no issued patents. For example, in some African and Central and South American countries, we have only limited patent protection for our technologies.
Added
Recoveries arise in the context of both branded technology licensing and patent licensing, and usually result from a settlement following a licensee audit under an existing license agreement, or as part of back-royalties paid in connection with a license agreement with a new licensee.
Removed
Consequently, we may realize less revenue from those regions in the future. Maintaining or growing our licensing revenue in developing countries will depend in part on whether we obtain patent rights in those countries, which is uncertain.
Added
For a discussion of certain risks related to patent expiration, please refer to Part I, Item 1A “ Risk Factors ” in this annual report on Form 10-K, under the heading " Our revenue could decline if we are unable to maintain patent coverage for our technologies.
Removed
Further, because of the limitations of the legal systems in many countries, the effectiveness of patents obtained or that may in the future be obtained is uncertain. RESEARCH AND DEVELOPMENT We conduct R&D activities at numerous locations in the U.S. and internationally. Dolby’s history of innovation has resulted in many forms of IP.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

86 edited+28 added−22 removed148 unchanged
Biggest changeWe face various risks in integrating acquired businesses, including: • Diversion of management time and focus from operating our business to acquisition integration challenges; • Cultural and logistical challenges associated with integrating employees from acquired businesses into our organization; • Retaining employees, suppliers and customers from businesses we acquire; • The need to implement or improve internal controls, procedures, and policies appropriate for a public company at businesses that prior to the acquisition may have lacked effective controls, procedures, and policies; • Possible write-offs or impairment charges resulting from acquisitions; • Unanticipated or unknown liabilities relating to acquired businesses; and • The need to integrate acquired businesses’ accounting, management information, manufacturing, human resources, and other administrative systems to permit effective management.
Biggest changeThe process of integrating an acquired company, business, or technology into our organization may create challenges to our business, including: • Diversion of management time and focus from operating our business to acquisition integration challenges; • Cultural and logistical challenges associated with integrating employees from acquired businesses into our organization and integrating acquired businesses' accounting, human resources, and other administrative systems with existing systems; • Retaining employees, suppliers and customers from businesses we acquire; • The need to implement or improve internal controls, procedures, and policies appropriate for a public company at businesses that prior to the acquisition may have lacked effective controls, procedures, and policies; • Possible write-offs or impairment charges resulting from acquisitions; and • Unanticipated or unknown liabilities relating to acquired businesses.
Revenue from Dolby Cinema 13 Table of Contents and cinema product sales is subject to our ability to develop and implement new technologies, the pace of construction or upgrade of screens, the financial stability of exhibitors, the advent of new or competing technologies, and the willingness of movie studios to produce films in our Dolby Atmos and Dolby Vision formats.
Revenue from Dolby Cinema and cinema product sales is subject to our ability to develop and implement new technologies, the pace of construction or upgrade of screens, the financial stability of exhibitors, the advent of new or competing technologies, 13 Table of Contents and the willingness of movie studios to produce films in our Dolby Atmos and Dolby Vision formats.
We are subject to a number of risks related to conducting business internationally, including: • U.S. and foreign government trade restrictions or sanctions, including those which may impose restrictions on the importation or exportation of products, equipment, materials, software, technologies, services, on technology transfers, or on the receipt or collection of payments and distribution of royalties, and any political or economic responses or counter-responses to such restrictions or sanctions, including any such restrictions, sanctions, responses, or counter-responses related to global military conflicts or changes in US export controls related to China and other countries; • Changes in trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers imposed by the U.S. or by other countries; • Compliance with applicable international laws and regulations, including antitrust and other competition laws and laws and regulations that relate to environmental, social, and governance matters, that may change unexpectedly, differ, or conflict with laws in other countries where we conduct business, or are otherwise not harmonized with one another; • Foreign government taxes, regulations, and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the U.S., and other laws limiting our ability to repatriate funds to the U.S.; 23 Table of Contents • Potential adverse changes in the political, social, and/or economic stability of or conflicts within the regions in which we operate or in diplomatic relations between governments, including policy changes, turmoil or disruptions resulting from elections or other leadership changes; • Difficulty in establishing, staffing, and managing foreign operations, including but not limited to restrictions on the ability to obtain or retain licenses required for operation, relationships with local labor unions and works councils, investment restrictions and/or requirements, and restrictions on foreign ownership of subsidiaries; • Adverse fluctuations in foreign currency exchange rates and interest rates, including risks related to any interest rate swap or other hedging activities we undertake; • Poor recognition and enforcement of IP rights; • Difficulties in enforcing contractual rights; • Multi-jurisdictional data protection and privacy laws, including, for example, the European Union's General Data Protection Regulation and restrictions on transferring personal data outside of a jurisdiction and potential legislation such as the Artificial Intelligence Act under consideration in the EU potentially impacting our development of products incorporating AI/ML or the use of AI/ML tools in our business; and • The global macroeconomic environment and potential slowing of key markets we serve.
We are subject to a number of risks related to conducting business internationally, including: • U.S. and foreign government trade restrictions or sanctions, including those which may impose restrictions on the importation or exportation of products, equipment, materials, software, technologies, services, on technology transfers, or on the receipt or collection of payments and distribution of royalties, and any political or economic responses or counter-responses to such restrictions or sanctions, including any such restrictions, sanctions, responses, or counter-responses related to global military conflicts, a trade war or changes in US export controls related to China and other countries; • Changes in global trade or trade relationships, including new and retaliatory tariffs, trade protection measures, import or export licensing requirements, trade agreements, trade embargoes and other trade barriers imposed by the U.S., China, or by other countries; • Compliance with applicable international laws and regulations, including antitrust and other competition laws and laws and regulations that relate to environmental, social, and governance matters, that may change unexpectedly, differ, or conflict with laws in other countries where we conduct business, or are otherwise not harmonized with one another; • Foreign government taxes, regulations, and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the U.S., and other laws limiting our ability to repatriate funds to the U.S.; 23 Table of Contents • Potential adverse changes in the political, social, and/or economic stability of or conflicts within the regions in which we operate or in diplomatic relations between governments, including policy changes, turmoil or disruptions resulting from elections or other leadership changes; • Difficulty in establishing, staffing, and managing foreign operations, including but not limited to restrictions on the ability to obtain or retain licenses required for operation, relationships with local labor unions and works councils, investment restrictions and/or requirements, and restrictions on foreign ownership of subsidiaries; • Adverse fluctuations in foreign currency exchange rates and interest rates, including risks related to any interest rate swap or other hedging activities we undertake; • Poor recognition and enforcement of IP rights; • Difficulties in enforcing contractual rights; • Multi-jurisdictional data protection and privacy laws, including, for example, the European Union's General Data Protection Regulation and restrictions on transferring personal data outside of a jurisdiction and potential legislation such as the Artificial Intelligence Act under consideration in the EU potentially impacting our development of products incorporating AI/ML or the use of AI/ML tools in our business; and • The global macroeconomic environment and potential slowing of key markets we serve.
We are also active in standards development where many contributing members work together to come up with next-generation technology standards in media, entertainment, and communications technologies. Nonetheless, it can be difficult to have our technologies and products adopted as industry standards.
We are also active in standards development where many contributing members work together to come up with next-generation technology standards in media, entertainment, and communications technologies. Nonetheless, it can be difficult to have our technologies and products adopted as technology standards.
Industry Standards Certain parts of our business are dependent on the inclusion of our technologies in industry standards, the adoption and development of which are not fully within our control. Standards-setting organizations establish technology standards for use in a wide range of products and solutions.
Technology Standards Certain parts of our business are dependent on the inclusion of our technologies in technology standards, the adoption and development of which are not fully within our control. Standards-setting organizations establish technology standards for use in a wide range of products and solutions.
The entertainment industry in particular has historically depended upon industry standards to ensure compatibility and interoperability across delivery platforms and a wide variety of consumer entertainment products.
The entertainment industry in particular has historically depended upon technology standards to ensure compatibility and interoperability across delivery platforms and a wide variety of consumer entertainment products.
Further, macroeconomic conditions such as inflation, geopolitical instability, global health risks, and other factors may adversely impact the ability of our partners to manufacture and distribute mobile devices and consumer demand for mobile devices. Our revenue from the PC market is reliant on key partnerships and is vulnerable to macroeconomic risks .
Further, macroeconomic conditions such as inflation, trade barriers, geopolitical instability, global health risks, and other factors may adversely impact the ability of our partners to manufacture and distribute mobile devices and consumer demand for mobile devices. Our revenue from the PC market is reliant on key partnerships and is vulnerable to macroeconomic risks .
The following could materially affect our effective tax rate: • Changes in geographic mix of earnings, where earnings are lower than anticipated in countries with lower tax rates and higher than anticipated in countries with higher tax rates; • Changes in the valuation of our deferred tax assets and liabilities; • Changes in transfer pricing arrangements; • Outcomes of tax audits; • Changes in accounting principles; • Changes in tax laws and regulations in the countries in which we operate, including an increase in tax rates, or an adverse change in the treatment of an item of income or expense; or • Our ability to effectively implement changes to our corporate structure in response to changes in applicable tax laws and regulations in the countries in which we operate.
The following could materially affect our effective tax rate: • Changes in geographic mix of earnings, where earnings are lower than anticipated in countries with lower tax rates and higher than anticipated in countries with higher tax rates; 24 Table of Contents • Changes in the valuation of our deferred tax assets and liabilities; • Changes in transfer pricing arrangements; • Outcomes of tax audits; • Changes in accounting principles; • Changes in tax laws and regulations in the countries in which we operate, including an increase in tax rates, or an adverse change in the treatment of an item of income or expense; or • Our ability to effectively implement changes to our corporate structure in response to changes in applicable tax laws and regulations in the countries in which we operate.
Further, Dolby.io faces pricing pressure from other platforms offering similar solutions that may be able to offer competing services at lower prices. We face competitive risks in situations where our customers are also current or potential competitors . We face competitive risks in situations where our customers are also current or potential competitors.
Further, Dolby OptiView faces pricing pressure from other platforms offering similar solutions that may be able to offer competing services at lower prices. We face competitive risks in situations where our customers are also current or potential competitors . We face competitive risks in situations where our customers are also current or potential competitors.
Further, demand levels may result in shortages of semiconductor components and other key materials that may adversely impact the ability of our implementation and system licensees and other customers to meet product demand in a timely fashion. Consumer spending weakness may impact our licensees and licensing revenues generally .
Further, demand levels may result in shortages of semiconductor components and other key materials that may adversely impact the ability of our implementation and system licensees and other customers to meet product demand in a timely fashion. Consumer spending weakness may impact our licensees and licensing revenue generally .
Even when a standards-setting organization incorporates our technologies in an industry standard for a particular market or geographic region, our technologies may not be the sole technologies adopted for that market. Furthermore, different standards may be adopted within a single market or region, and across different markets and regions.
Even when a standards-setting organization incorporates our technologies in an technology standard for a particular market or geographic region, our technologies may not be the sole technologies adopted for that market. Furthermore, different standards may be adopted within a single market or region, and across different markets and regions.
In addition, we have limited control over manufacturing performed by contract manufacturers, which could result in quality problems.
We have limited control over manufacturing performed by contract manufacturers, which could result in quality problems.
For example, the continued growth of our revenue from the broadcast market will depend upon both the continued global adoption of DTV generally, including in emerging markets, and the choice to use our technologies where it is one of several accepted industry standards. Being part of a standard may limit our licensing practices .
For example, the continued growth of our revenue from the broadcast market will depend upon both the continued global adoption of DTV generally, including in emerging markets, and the choice to use our 15 Table of Contents technologies where it is one of several accepted industry standards. Being part of a standard may limit our licensing practices .
A successful challenge by a third party could result in the termination of a license agreement or an increase in the amount of royalties we have to pay to the third party. TECHNOLOGY TRENDS AND DEVELOPMENTS Developing new and enhanced technologies is inherently difficult and our revenue growth may be impacted if we are unsuccessful in our efforts .
A successful challenge by a third party could result in the termination of a license agreement or an increase in the amount of royalties we have to pay to the third party. 16 Table of Contents TECHNOLOGY TRENDS AND DEVELOPMENTS Developing new and enhanced technologies is inherently difficult and our revenue growth may be impacted if we are unsuccessful in our efforts .
Industry relationships also play an important role in other markets we serve; for instance, our relationships with companies building real-time digital experiences support the adoption of Dolby.io solutions.
Industry relationships also play an important role in other markets we serve; for instance, our relationships with companies building real-time digital experiences support the adoption of Dolby OptiView solutions.
Further, the commercial success of products incorporating Dolby formats, content released in Dolby formats, 17 Table of Contents and Dolby Cinemas generally, depends upon a number of factors outside of our control, including, but not limited to, consumer preferences, critical reception, timing of release, marketing efforts of third parties, and general market conditions.
Further, the commercial success of products incorporating Dolby formats, content released in Dolby formats, and Dolby Cinemas generally, depends upon a number of factors outside of our control, including, but not limited to, consumer preferences, critical reception, timing of release, marketing efforts of third parties, and general market conditions.
In the past, some licensees have understated or failed to report the number of products incorporating our technologies that they shipped, and we have not been able to collect and recognize revenue to which we were entitled. We expect that we will continue to experience understatement and non-reporting of royalties by our 16 Table of Contents licensees.
In the past, some licensees have understated or failed to report the number of products incorporating our technologies that they shipped, and we have not been able to collect and recognize revenue to which we were entitled. We expect that we will continue to experience understatement and non-reporting of royalties by our licensees.
Many of the products in which our technologies are incorporated are discretionary goods, such as PCs, TVs, STBs, video game consoles, AV Receivers, mobile devices, in-car entertainment systems, and home-theater systems, which makes revenue generated by such technologies vulnerable to weakness in consumer spending.
Many of the products in which our technologies are incorporated are discretionary goods, such as PCs, TVs, STBs, video game consoles, AV Receivers, mobile devices, in-car 14 Table of Contents entertainment systems, and home-theater systems, which makes revenue generated by such technologies vulnerable to weakness in consumer spending.
Moreover, the Dolby family and their affiliates may take actions in their own interests that our other stockholders do not view as beneficial. Sales of substantial amounts of our Class A common stock in the public markets could reduce the price of our Class A common stock .
Moreover, the Dolby family and their affiliates may take actions in their own interests that our other stockholders do not view as beneficial. 25 Table of Contents Sales of substantial amounts of our Class A common stock in the public markets could reduce the price of our Class A common stock .
One such trend is the shift by consumers in certain markets away from subscription-based cable and satellite television providers toward streaming services, commonly referred to as "cord-cutting." While cable and satellite television often require a STB, today consumers can also access streaming media through smart TVs or DMA devices.
One such trend has been the shift by consumers in certain markets away from subscription-based cable and satellite television providers toward streaming services, commonly referred to as "cord-cutting." While cable and satellite television often require a STB, consumers can also access streaming media through smart TVs or DMA devices.
We expect to face increased royalty pricing pressure for our technologies as we seek to increase the adoption of our technologies in online content and portable devices, such as tablets and smartphones. Such pricing pressures may be exacerbated by elevated rates of inflation, which may cause device manufacturers to take additional steps to limit costs.
We expect to face increased royalty pricing pressure for our technologies as we seek to increase the adoption of our technologies in online content and portable devices, such as tablets and smartphones. Such pricing pressures may be exacerbated by elevated rates of inflation, tariffs and other trade barriers, which may cause device manufacturers to take additional steps to limit costs.
However, our patent program faces a number of challenges, including: • Possibility that innovations may not be protectable; • Failure to protect innovations that later turn out to be important; • Insufficient patent protection to prevent third parties from designing around our patent claims; • Our pending patent applications may not be approved; and • Possibility that an issued patent may later be found to be invalid or unenforceable.
However, our patent program faces a number of challenges, including: • Possibility that innovations may not be protectable; • Failure to protect innovations that later turn out to be important; • Insufficient patent protection to prevent third parties from designing around our patent claims; • Our pending patent applications may not be approved; • Possibility that an issued patent may later be found to be invalid or unenforceable; • Patents eventually expire.
If we fail to maintain and strengthen our industry relationships, industry participants may be less likely to purchase and use our technologies, products, and services, or create content incorporating our technologies. 22 Table of Contents Our M&A activity is subject to certain risks, including risks associated with integrating acquired businesses .
If we fail to maintain and strengthen our industry relationships, 22 Table of Contents industry participants may be less likely to purchase and use our technologies, products, and services, create content incorporating our technologies, or develop standards that incorporate our technologies. Our M&A activity is subject to certain risks, including risks associated with integrating acquired businesses .
The efforts we have taken to protect our proprietary rights may not be sufficient or effective. We also seek to maintain select IP as trade secrets, and third parties or our employees could intentionally or accidentally compromise the IP that we maintain as trade secrets. In addition, protecting our IP rights is costly and time consuming.
The efforts we have taken to protect our proprietary rights may not be sufficient or effective. We also seek to maintain 17 Table of Contents select IP as trade secrets, and third parties or our employees could intentionally or accidentally compromise the IP that we maintain as trade secrets. In addition, protecting our IP rights is costly and time consuming.
Approximately 65%, 64% and 63% of our revenue was derived outside of the U.S. in fiscal year 2024, 2023, and 2022, respectively .
Approximately 63%, 65% and 64% of our revenue was derived outside of the U.S. in fiscal year 2025, 2024, and 2023, respectively .
STOCK-RELATED ISSUES The Dolby family has control over stockholder decisions as a result of the control of a majority of the voting 25 Table of Contents power of our outstanding common stock by them and their affiliates .
STOCK-RELATED ISSUES The Dolby family has control over stockholder decisions as a result of the control of a majority of the voting power of our outstanding common stock by them and their affiliates .
Our future success depends on our ability to enhance our technologies and products and to develop new technologies and products that address market needs in a timely manner, including the development of technologies and products that incorporate rapidly developing generative artificial intelligence and other artificial intelligence and machine learning technologies (“AI/ML”).
Our future success depends on our ability to enhance our technologies and products and to develop new technologies and products that address market needs in a timely manner, including the development of technologies and products that incorporate rapidly developing generative artificial intelligence and other artificial intelligence and machine learning technologies ("AI/ML").
This trend is reducing the importance of the inclusion of our technology in certain 15 Table of Contents broadcast standards while increasing the importance of inclusion within internet and mobile industry standards. We cannot predict the extent to which this trend may impact our revenue. Participants may choose alternative technologies within standards .
This trend is reducing the importance of the inclusion of our technology in certain broadcast standards while increasing the importance of inclusion within internet and mobile technology standards. We cannot predict the extent to which this trend may impact our revenue. Participants may choose alternative technologies within standards .
Further, the OECD, European Commission, EU Member States and other individual countries have made and could make additional competing jurisdictional claims over the taxes owed on earnings of multinational companies in their respective countries or regions.
Further, the OECD, European Commission, EU Member States and other individual countries have made and could make additional competing jurisdictional claims over the taxes owed on earnings of multinational companies in their respective countries or regions. Recently, the G7 and the U.S.
This appreciation may not occur and our Class A common stock may in fact depreciate in value. GENERAL RISK FACTORS Macroeconomic conditions, including inflation, elevated interest rates, supply chain constraints and the lasting effects of the COVID-19 pandemic have impacted and may continue to impact the markets we serve and our business and results of operations.
This appreciation may not occur and our Class A common stock may in fact depreciate in value. GENERAL RISK FACTORS Macroeconomic conditions, including inflation, elevated interest rates, and supply chain constraints have impacted and may continue to impact the markets we serve and our business and results of operations.
To the extent these actions take place in the countries that we operate, it is possible that these law changes and efforts may increase uncertainty and have an adverse impact on our effective tax rates or operations. We are subject to the periodic examination of our income tax returns by tax authorities.
To the extent these developments impact actions by tax jurisdictions in the countries that we operate, it is possible that these and future law changes and efforts may increase uncertainty and have an adverse impact on our effective tax rates or operations. We are subject to the periodic examination of our income tax returns by tax authorities.
To be successful, we must maintain and grow our relationships with a broad range of industry participants, including: • Content creators, such as film directors, studios, mobile and online content producers, and music producers; • Content distributors, such as studios, film exhibitors, broadcasters, operators, streaming providers, and OTT video service providers and video game publishers; • Companies building real-time digital experiences that increase audience engagement; and • Device manufacturers.
To be successful, we must maintain and grow our relationships with a broad range of industry participants, including: • Content creators, such as film directors, studios, mobile and online content producers, and music producers; • Content distributors, such as studios, film exhibitors, broadcasters, operators, streaming providers, and OTT video service providers and video game publishers; • Companies building real-time digital experiences that increase audience engagement; • Device manufacturers; and • Standards-setting organizations and other participants in the development of industry standards.
A third party may disagree with our interpretation of the terms of a license agreement or, as a result of an audit, a third party could challenge the accuracy of our calculation. We are regularly involved in discussions with third party technology licensees regarding license terms.
A licensee may disagree with our interpretation of the terms of a license agreement or, as a result of an audit, a licensee could challenge the accuracy of our calculation. We are regularly involved in discussions with licensees regarding license terms.
Our revenue and associated demand for Dolby Cinema and cinema products are affected by cinema industry and macroeconomic conditions, which are subject to risks including consumer trends and box office performance generally, delays in cinematic releases, the seasonality of film releases and associated moviegoing attendance, and other events or conditions in the cinema industry.
Our revenue and associated demand for Dolby Cinema and cinema products are affected by cinema industry and macroeconomic conditions, which are subject to risks including consumer trends and box office performance in general, delays in cinematic releases, the seasonality of film releases and associated moviegoing attendance, potential tariffs and other trade barriers, and other events or conditions in the cinema industry.
A small number of our licensees or other customers may represent a significant percentage of our licensing, products, or services revenue. Customer demand for our technologies and products can shift quickly as many of our markets are rapidly evolving.
The loss of a key licensee or customer may materially impact our revenue . A small number of our licensees or other customers may represent a significant percentage of our Licensing, Products, or Services revenue. Customer demand for our technologies and products can shift quickly as many of our markets are rapidly evolving.
Similarly, the success of Dolby Cinema is dependent on our ability to partner with movie theater exhibitors to launch new Dolby Cinema sites and to deploy new sites in accordance with plans, and on the continued release and box-office success of new films in the Dolby Vision and Dolby Atmos formats released through Dolby Cinemas.
Similarly, the success of Dolby Cinema and cinema products is dependent on our ability to partner with movie theater exhibitors to launch new Dolby Cinema locations and screens using our cinema products and to deploy new sites in accordance with plans, and on the continued release and box-office success of new films in the Dolby Vision and Dolby Atmos formats.
For example, beginning with PCs shipping with the 24H2 version of Windows 11, Microsoft is changing the way Dolby’s DD and DD+ decoders are provided to third party PC OEMs. For such devices, Dolby has begun distributing those codecs directly to PC OEMs instead of through Microsoft’s Windows operating system.
For example, beginning with PCs shipping with the 24H2 version of Windows 11, Microsoft changed the way Dolby’s DD and DD+ decoders are provided to third party PC OEMs. For such devices, Dolby now distributes those codecs directly to PC OEMs instead of through Microsoft’s Windows operating system.
Although we generally attempt to contractually limit our liability, if these contract provisions are not enforced, or are unenforceable for any reason, or if liabilities arise that are not effectively limited, we could incur substantial costs in defending and settling product liability claims. Production processes for our products are subject to interruption, delay, and other risks .
Although we generally attempt to contractually limit our liability, if these contract provisions are not enforced, or are unenforceable for any reason, or if liabilities arise that are not effectively limited, we could incur substantial costs in defending and settling product liability claims.
As of September 27, 2024, the Dolby family and their affiliates had voting power of 99.8% of our outstanding Class B common stock, which combined with their shares of our Class A common stock, represented 85.6% of the combined voting power of our outstanding Class A and Class B common stock.
As of September 26, 2025, the Dolby family and their affiliates had voting power of 99.8% of our outstanding Class B common stock, which combined with their shares of our Class A common stock, represented 85.0% of the combined voting power of our outstanding Class A and Class B common stock.
The minimum tax directive has been adopted by the EU for implementation by its Member States into national legislation and may be adopted by other jurisdictions, including the U.S.
The minimum tax directive has been adopted by the EU for implementation by its Member States into national legislation, several foreign jurisdictions, and may be adopted by other jurisdictions.
Our revenue and operations and the markets we serve have been, and may continue to be, impacted by macroeconomic conditions, including but not limited to, inflation, elevated interest rates, the lasting effects of the COVID-19 pandemic, supply chain constraints, increased shipping costs, international conflicts, reduced discretionary consumer spending, and reduced new product investment by our customers caused by elevated interest rates and lower demand.
Our revenue and operations and the markets we serve have been, and may continue to be, impacted by macroeconomic conditions, including but not limited to, inflation, elevated interest rates, supply chain constraints, increased shipping costs, tariffs and changes in international trade relations, international conflicts, reduced discretionary consumer spending, and reduced new product investment by our customers caused by elevated interest rates and lower demand.
In addition to patents covering technology we license directly, if patents we license through patent pool arrangements expire or we are otherwise unable to maintain our share of pool royalties, then our revenue could be impacted.
If we are unable to refresh our technology with new patented inventions or expand our patent portfolio, our revenue could decline. In addition to patents covering technology we license directly, if patents we license through patent pool arrangements expire or we are otherwise unable to maintain our share of pool royalties, then our revenue could be impacted.
Weakness in general economic conditions due to inflation, elevated interest rates, lower consumer confidence, a potential 14 Table of Contents recession, pandemic or other adverse economic conditions, may suppress consumer demand in our markets and consumers going to the movies.
Weakness in general economic conditions due to inflation, elevated interest rates, lower consumer confidence, tariffs and non-tariff trade barriers, a potential recession, pandemic or other adverse economic conditions, may suppress consumer demand in our markets and consumers going to the movies.
Our business may be negatively impacted by intellectual property litigation . Companies in the technology and entertainment industries frequently engage in litigation based on allegations of infringement or other violations of IP rights. We have faced such claims in the past, and we expect to face similar claims in the future.
Companies in the technology and entertainment industries frequently engage in litigation based on allegations of infringement or other violations of IP rights. We have faced such claims in the past, and we expect to face similar claims in the future.
Claimants in such cases could seek to restrict or change our licensing practices or our ability to license our technologies. Additionally, where our technologies are incorporated into a standard, our licensing practices may become subject to additional regulatory requirements.
Claimants in such cases could seek to restrict or change our licensing practices or our ability to license our technologies. Additionally, where our technologies are incorporated into a standard, our licensing practices may become subject to additional regulatory requirements. Royalty Reporting Reporting practices and uncertainty may result in fluctuations in our royalty revenue from period to period.
We could incur costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims, or could be required to incur substantial investigation or remediation costs, if we were to violate or become liable under environmental laws.
We could incur costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims, or could be required to incur substantial investigation or remediation costs, if we were to violate or become liable under environmental laws. We are subject to complex and changing tax laws which may impact our financial results .
Also, because of limitations in the legal systems in many countries, our ability to obtain and enforce patents in many countries is uncertain, and we must strengthen and develop relationships with entertainment industry participants worldwide to increase our ability to enforce our IP and contractual rights without relying solely on the legal systems in the countries in which we operate. 19 Table of Contents OPERATIONS Reliance on key suppliers presents certain risks to our business, many of which are beyond our control .
Also, because of limitations in the legal systems in many countries, our ability to obtain and enforce patents in many countries is uncertain, and we must strengthen and develop relationships with entertainment industry participants worldwide to increase our ability to enforce our IP and contractual rights without relying solely on the legal systems in the countries in which we operate.
Our information technology systems, applications and infrastructure may be vulnerable to attacks by malicious actors including, but not limited to, nation-states and cyber criminals, 20 Table of Contents malware, software defects or other technical malfunctions, ransomware attacks, or other disruptions.
Increasingly, companies are subject to a wide variety of attacks on their networks and systems on an ongoing basis. Our information technology systems, applications and infrastructure may be vulnerable to attacks by malicious actors including, but not limited to, nation-states and cyber criminals, 20 Table of Contents malware, software defects or other technical malfunctions, ransomware attacks, or other disruptions.
Moreover, if any such errors cause unintended consequences, we could incur substantial costs in defending and settling product liability claims.
Moreover, if any errors or vulnerabilities cause unintended consequences, we could incur substantial costs in investigating and remediating those consequences, including defending and settling product liability claims.
Although we anticipate paying regular quarterly dividends for the foreseeable future, dividend declarations and the establishment of future record and payment dates are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of our stockholders.
Although we anticipate paying regular quarterly dividends for the foreseeable future, we are not obligated to, and cannot provide assurance that we will, continue to pay dividends. Dividend declarations are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of our stockholders.
Additionally, court and administrative rulings may interpret existing patent laws and regulations in ways that hurt our ability to obtain, license, and enforce our patents.
Changes to the patent and intellectual property laws and regulations in the U.S. and abroad may limit our ability to obtain, license, and enforce our rights. Additionally, court and administrative rulings may interpret existing patent laws and regulations in ways that hurt our ability to obtain, license, and enforce our patents.
Although we cannot predict whether or not we will complete any such acquisitions or other transactions in the future, any of these transactions could be significant in relation to our market capitalization, financial condition, or results of operations. The process of integrating an acquired company, business, or technology may create unforeseen difficulties and expenditures.
Although we cannot predict whether or not we will complete any such acquisitions or other transactions in the future, any of these transactions could be significant in relation to our market capitalization, financial condition, or results of operations.
Changes in U.S. tax law, including the Tax Cuts and Jobs Act ("Tax Act") and the Inflation Reduction Act, may affect our business. These provisions, their interpretations, and other proposed changes to law could further impact our corporate trading structure and adversely affect our tax rate and cash flow in future years.
These provisions, their interpretations, and other proposed changes to law could further impact our corporate trading structure and adversely affect our tax rate and cash flow in future years.
Our license agreements are typically non-exclusive,and frequently do not mandate use of our technologies. Our revenue will decline if our licensees choose not to incorporate our technologies into their products or if they sell fewer products incorporating our technologies. The loss of a key licensee or customer may materially impact our revenue .
Our licensing businesses depend on OEMs and other licensees to incorporate our technologies into their products. Our license agreements are typically non-exclusive, and frequently do not mandate use of our technologies. Our revenue will decline if our licensees choose not to incorporate our technologies into their products or if they sell fewer products incorporating our technologies.
In addition, if our products or technologies contain errors, we could be required to replace or reengineer them or rely upon parties who have incorporated our technologies into their products to implement updates to address such issues, which could cause delays or increase our costs.
If our products or technologies contain errors, we could be required to replace or reengineer them and, as with security vulnerabilities, we may rely upon parties who have incorporated our technologies into their products to implement updates to address such issues, which could leave any such errors or vulnerabilities unresolved.
As consumers trend toward canceling subscriptions to these traditional cable and satellite providers and turn to streaming media, we expect demand for STBs in certain regions to continue to decline.
As consumers have trended toward canceling subscriptions to these traditional cable and satellite providers in favor of streaming media, we have observed declines in demand for STBs in certain regions.
The market for broadcast technologies in particular has traditionally been heavily based on industry standards, in some cases mandated by governments choosing from among alternative standards, and we expect this to continue to be the case in the future. The continued advancement of OTT media delivery and consumption is altering the landscape for broadcast standards.
The market for broadcast technologies in particular has traditionally been heavily based on technology standards, in some cases mandated by governments choosing from among alternative standards. The continued advancement of OTT media delivery and consumption is altering the landscape for broadcast standards. The importance of broadcast standards in the entertainment technology ecosystem has been gradually diminishing over the recent years.
If we fail to promote and maintain the Dolby brand successfully in licensing, products or services, our business will suffer. Furthermore, we believe that the strength of our brand may affect the likelihood that our technologies are adopted as industry standards in various markets and for various applications.
Furthermore, we believe that the strength of our brand may affect the likelihood that our technologies are adopted as industry standards in various markets and for various applications.
Although we implement policies and procedures designed to ensure compliance with the FCPA and U.S. export controls, such measures can not guarantee that all of our employees, distributors, dealers, and agents will not take actions in violation of our policies or these regulations. Environmental laws and regulations may pose additional costs on and otherwise impact our products and operations .
Although we implement policies and procedures designed to ensure compliance with the FCPA and U.S. export controls, such measures can not guarantee that all of our employees, distributors, dealers, and agents will not take actions in violation of our policies or these regulations, which could subject us to criminal or civil penalties as well as potential stockholder litigation.
Maintaining and strengthening the Dolby brand is critical to maintaining and expanding our licensing, products, and services business, as well as our ability to offer technologies for new markets. Our continued success depends on our reputation for providing high quality technologies, products, and services across a wide range of entertainment markets, including the consumer electronics, PC, broadcast, and gaming markets.
Our continued success depends on our reputation for providing high quality technologies, products, and services across a wide range of entertainment markets, including the consumer electronics, PC, broadcast, and gaming markets. If we fail to promote and maintain the Dolby brand successfully in licensing, products or services, our business will suffer.
We rely on information technology systems in the conduct of our business, including systems designed and managed by third parties. Many of these systems contain sensitive and confidential information, including our trade secrets and proprietary business information, and personal data, as well as content and information owned by or pertaining to our customers, suppliers and business partners.
Many of these systems contain sensitive and confidential information, including our trade secrets and proprietary business information, and personal data, as well as content and information owned by or pertaining to our customers, suppliers and business partners. Protecting this information is important to our operations and business strategy.
Additional risks related to fluctuations in foreign currency exchange rates are described in the Foreign Currency Exchange Risk section of Part II, Item 7A " Quantitative and Qualitative Disclosures About Market Risk." Business interruptions by natural disasters and other events beyond our control could adversely impact our business .
Additional risks related to fluctuations in foreign currency exchange rates are described in the Foreign Currency Exchange Risk section of Part II, Item 7A " Quantitative and Qualitative Disclosures About Market Risk." Maintaining a credit facility and future debt obligations could adversely affect our business and financial condition.
As a result, we face exposure to adverse movements in currency exchange rates as the financial results of our international operations are translated from local currency into U.S. dollars upon consolidation. The majority of our revenue generated from international markets is denominated in U.S. dollars, while the operating expenses of our foreign subsidiaries are predominantly denominated in local currencies.
We earn revenue, pay expenses, own assets and incur liabilities in foreign countries using several currencies other than the U.S. dollar. As a result, we face exposure to adverse movements in currency exchange rates as the financial results of our international operations are translated from local currency into U.S. dollars upon consolidation.
In October 2014, we announced a quarterly cash dividend program for our stockholders that was initiated by our Board of Directors.
If we curtail our repurchase program, our stock price may be negatively affected. There are risks associated with our dividend program . In October 2014, we announced a quarterly cash dividend program for our stockholders that was initiated by our Board of Directors.
Our customers use our DD implementation for quality, reliability, and performance, even in locations where we have not had applicable patent coverage.
Our customers use our DD and DD+ implementation for quality, reliability, and performance and to take advantage of other elements of these offerings such as Dolby branding, even in locations where we have not had or no longer have applicable patent coverage.
Ensuring the quality of our products and the products in which our technology is incorporated is inherently difficult, and product quality failures can be costly . Our products, and products that incorporate our technologies, are complex and sometimes contain software or hardware errors that are not detected during testing, particularly when first introduced or when new versions are released.
Ensuring the quality of our products and the products in which our technology is incorporated is inherently difficult, and product quality failures can be costly . While we conduct security testing prior to releasing new products or new versions of existing products, there are sometimes errors or vulnerabilities that are not detected during development or testing.
The macroeconomic conditions also impart substantial uncertainty into our operating environment, which presents additional challenges for our business. These factors and the related uncertainty may cause delays or a decrease in the adoption or implementation of our technologies into new products by partners and licensees.
These factors and the related uncertainty may cause delays or a decrease in the adoption or implementation of our technologies into new products by partners and licensees. These conditions may impact consumer demand for devices and services and our partners’ ability to manufacture devices.
Certain of those minerals are used in the manufacturing process of electrical components that our products utilize. The potential inclusion of conflict minerals in the materials used in our products could affect the sourcing, 24 Table of Contents availability and pricing of such materials as well as the companies we use to manufacture our products.
Avoiding the potential inclusion of “conflict minerals” in the materials used in our products could also affect the sourcing, availability and pricing of such materials as well as the companies we use to manufacture our products.
Further, our hedging programs may not be effective to offset any, or more than a portion, of the adverse impact of currency exchange rate movements.
Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains or losses that are reflected in our consolidated statements of operations. Further, our hedging programs may not be effective to offset any, or more than a portion, of the adverse impact of currency exchange rate movements.
We have often experienced, and expect to continue to experience, problems with non-licensee OEMs and software vendors, particularly in certain emerging economies, incorporating our technologies and trademarks into their products without our authorization and without paying us any licensing fees. Manufacturers of ICs containing our technologies occasionally sell these ICs to third parties who are not our system licensees.
We have often experienced, and expect to continue to experience, problems with non-licensee OEMs and software vendors, particularly in certain emerging economies, incorporating our technologies and trademarks into their products without authorization and without paying licensing fees. Unauthorized IP use occurs in the context of both branded products and technology offered through open standards.
At September 27, 2024, the Dolby family and their affiliates owned 314,968 shares of our Class A common stock and 35,597,733 shares of our Class B common stock.
As of September 26, 2025, the Dolby family and their affiliates owned 246,295 shares of our Class A common stock and 34,587,733 shares of our Class B common stock.
The current macroeconomic environment has negatively impacted, and may continue to negatively impact, many of our licensees and that directly impacts, and may continue to impact, our financial results. 26 Table of Contents The impacts of the current macroeconomic environment on our partners have resulted in, and may continue to cause, the disruption of consumer products' supply chains, shortages of certain semiconductor components, and delays in shipments, product development, and product launches.
The impacts of the current macroeconomic environment on our partners have resulted in, and may continue to cause, the disruption of consumer products' supply chains, shortages of certain semiconductor components, and delays in shipments, product development, and product launches. The macroeconomic conditions also impart substantial uncertainty into our operating environment, which presents additional challenges for our business.
From time to time, we are the subject of requests for information, market conduct examinations, inquiries or investigations by industry groups and/or regulatory agencies in these jurisdictions. For instance, the Korean Fair Trade Commission requested information relating to our business practices in South Korea on various occasions, and initially made findings regarding the audit of a single customer.
From time to time, we are the subject of requests for information, market conduct examinations, inquiries or investigations by industry groups and/or regulatory agencies in these jurisdictions.
Furthermore, future growth of our cinema products offerings also depends upon new theater construction and entering into an equipment replacement cycle whereby previously purchased cinema products are upgraded or replaced. To the extent that such cinema industry and macroeconomic challenges constrain the growth of our Dolby Cinema and cinema products offerings, our revenue may be adversely impacted.
Also, a portion of our opportunity lies in the China market, which is subject to unique economic and geopolitical risks. Furthermore, future growth of our cinema products offerings also depends upon new theater construction and entering into an equipment replacement cycle whereby previously purchased cinema products are upgraded or replaced.
Customers and Distributors Our licensing business depends on the incorporation of our technologies into products and the sales of such products, which are, in large part, not within our control . Our licensing businesses depend on OEMs and other licensees to incorporate our technologies into their products.
To the extent that such cinema industry and macroeconomic challenges constrain the growth of our Dolby Cinema and cinema products offerings, our revenue may be adversely impacted. Customers Our licensing business depends on the incorporation of our technologies into products and the sales of such products, which are, in large part, not within our control .
These conditions may impact consumer demand for devices and services and our partners’ ability to manufacture devices. Further, we may be negatively impacted by delays in transaction cycles and our recoveries efforts due to the noted macroeconomic conditions and related uncertainty.
Further, we may be negatively impacted by delays in transaction cycles and our recoveries efforts due to the noted macroeconomic conditions and related uncertainty. The future implications of these macroeconomic conditions on our business, the markets we serve, results of operations and overall financial position remain uncertain.
Supply chain disruptions and extended lead times for semiconductor and electrical components may limit the availability of products and result in difficulty meeting demand. We face threats to the confidentiality, integrity, and availability of our information systems, which could result in the misappropriation of sensitive information, disruption of our business, reputational damage, legal exposure, and financial losses.
We face threats to the confidentiality, integrity, and availability of our information systems, which could result in the misappropriation of sensitive information, disruption of our business, reputational damage, legal exposure, and financial losses. We rely on information technology systems in the conduct of our business, including systems designed and managed by third parties.
These sales, and the failure of such manufacturers to report the sales, facilitate the unauthorized use of our IP. As emerging economies transition from analog to digital content, such as the transition from analog to digital broadcast, we expect to experience an increase in problems with this form of piracy.
As emerging economies have transitioned from analog to digital content, such as the transition from analog to digital broadcast, we have observed an increase in problems with this form of piracy. Our business may be negatively impacted by intellectual property litigation .
Production difficulties or inefficiencies can interrupt production, resulting in our inability to deliver products on time or in a cost effective manner, which could harm our competitive position. We rely on contract manufacturers to manufacture our products and such reliance involves risks, including limited control over timely delivery and quality of such products.
OPERATIONS Production processes for our products and reliance on key suppliers present certain risks to our business, many of which are beyond our control . We rely on contract manufacturers to manufacture our products and such reliance involves risks, including limited control over timely delivery and quality of such products.
Therefore, our operating expenses will increase when the U.S. dollar weakens against the local currency and decrease when the U.S. dollar strengthens against the local currency. Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains or losses that are reflected in our consolidated statements of operations.
The majority of our revenue generated from international markets is denominated in U.S. dollars, while the operating expenses of our foreign subsidiaries are predominantly denominated in local currencies. Therefore, our operating expenses will increase when the U.S. dollar weakens against the local currency and decrease when the U.S. dollar strengthens against the local currency.

… 56 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−0 removed12 unchanged
Biggest changeFor additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K, under the heading “Operations”.
Biggest changeFor additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Part I, Item 1A “ Risk Factors ” in this annual report on Form 10-K, under the heading “Operations.” Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Our CISO has over 25 years of experience in technology, with more than 15 years 28 Table of Contents in information security, holding multiple roles including five years as a CISO for a health insurance company. Our CISO reports on cybersecurity risk management and other matters to our CIO, who in turn reports to our Chief Executive Officer.
Our CISO has over 25 years of experience in technology, with more than 15 years in information security, holding multiple roles including five years as a CISO for a health insurance company. Our CISO reports on cybersecurity risk management and other matters to our CIO, who in turn reports to our Chief Executive Officer.
Our CISO manages a team of cybersecurity professionals with broad experience and expertise, including in cybersecurity strategy and operations, incident response, cybersecurity education and awareness, threat management, insider threats and regulatory compliance.
Our CISO manages a team of cybersecurity professionals with broad experience and expertise, including in cybersecurity strategy and operations, incident response, cybersecurity education and awareness, threat management, insider 28 Table of Contents threats and regulatory compliance.
GOVERNANCE One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats. Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our officers are responsible for the day-to-day management of the material risks we face.
Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our officers are responsible for the day-to-day management of the material risks we face.
We received ISO 27001 certification for our cybersecurity function and functionality for streaming media through Dolby Millicast in 2024 and are subject to annual ISO 27001 standard compliance monitoring audits in connection with that certification. We also take part in periodic security audits by our clients and partners.
Our CISO and information security team also develop and implement policies and best practices related to product security. We received ISO 27001 certification for our cybersecurity function and functionality for streaming media through Dolby OptiView in 2024 and are subject to annual ISO 27001 standard compliance monitoring audits in connection with that certification.
Added
In fiscal 2025, Dolby Atmos for cars achieved TISAX certification, a global information security standard for the automotive industry. We also take part in periodic security audits by our clients and partners.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−2 removed3 unchanged
Biggest changeWe ceased occupancy of the leased space at 100 Potrero Avenue, and do not intend to re-occupy this location. We remained responsible for operating expenses, taxes, and the condition, operation, repair, maintenance, security, and management of the premises.
Biggest changeWe remained responsible for operating expenses, taxes, and the condition, operation, repair, maintenance, security, and management of the premises through October 31, 2024, the expiration date of our lease.
Other Properties We also own a commercial office building located in Sunnyvale, California, and lease additional R&D, sales, product testing, and administrative facilities from third parties in California, New York, Indiana, Pennsylvania, Missouri, Colorado, and internationally, including in Asia, Europe, Australia, the Middle East, and South America.
Other Properties We also own a commercial office building located in Sunnyvale, California, and lease additional R&D, sales, product testing, and administrative facilities from third parties in California, New York, Maryland, Indiana, Pennsylvania, Missouri, Colorado, and internationally, including in Asia, Europe, Australia, the Middle East, and South America.
We own the remaining financial interests in these real estate entities. Specifically, we hold a 49.0% minority ownership interest in Dolby Properties Burbank, LLC, which owns a 22,000 square feet facility in Burbank that we are leasing until 2025.
We own the remaining financial interests in these real estate entities. Specifically, we hold a 49.0% minority ownership interest in Dolby Properties Burbank, LLC, which owns a 22,000 square feet facility in Burbank that we are leasing until 2030.
We also agreed to indemnify and hold the Dolby family trusts, as landlord, harmless from and against certain liabilities, damages, claims, costs, penalties, and expenses arising from our conduct related to the premises.
We also agreed to indemnify and hold the Dolby family trusts, as landlord, harmless from and against certain liabilities, damages, claims, costs, penalties, and expenses arising from our conduct related to the premises through such expiration date.
We also had a sublease with a subtenant for the remaining lease term at 100 Potrero Avenue, pursuant to which the subtenant was required to reimburse us with respect to the foregoing expenses and taxes with respect to the subleased premises and to indemnify and hold us harmless with respect to the subleased premises in the same manner described above. 29 Table of Contents
We also had a sublease with a subtenant through such expiration date, pursuant to which the subtenant was required to reimburse us with respect to the foregoing expenses and taxes with respect to the subleased premises and to indemnify and hold us harmless with respect to the subleased premises in the same manner described above.
We also hold a 10.0% minority ownership interest in Dolby Properties, LP, which owns a 17,500 square foot facility in Wootton Bassett. We are no longer leasing the Wootton Bassett facility. 100 Potrero Avenue, San Francisco, California Since 1980, we have leased a corporate office located at 100 Potrero Avenue, San Francisco, California from the various Dolby family trusts.
We also hold a 10.0% minority ownership interest in Dolby Properties, LP, which owns an approximately 34,000 square foot facility in Wootton Bassett. We are no longer leasing the Wootton Bassett facility. 100 Potrero Avenue, San Francisco, California We ceased occupancy of the leased space at 100 Potrero Avenue, and do not intend to re-occupy this location.
Removed
The lease for this office expired on October 31, 2024, and provided approximately 70,000 square feet of space.
Removed
The Dolby family trusts retained the right, which they have exercised, to sublease approximately 1,617 square feet of office space in the premises at a rental rate equal to the then current base rent per square foot paid by us plus $14 per square foot per year (reflecting estimated costs payable by us for the operation and maintenance of the premises, subject to an annual increase of 1.5% per year during each year of the sublease term).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed1 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings that occasionally arise in the normal course of business activities, including claims of alleged infringement of IP rights, commercial, employment, and other matters. In our opinion, resolution of these proceedings is not expected to have a material adverse impact on our operating results or financial condition.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings that occasionally arise in the normal course of business activities, including claims of alleged infringement of IP rights, commercial, employment, and other matters.
Added
In our opinion, resolution of these proceedings is not expected to have a material adverse impact on our operating results or financial 29 Table of Contents condition.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed10 unchanged
Biggest changeThe following table summarizes the initial amount of authorized repurchases as well as additional repurchases approved by our Board of Directors as of September 27, 2024 (in thousands): Date of Authorization Authorization Amount Fiscal 2010: November 2009 $ 250,000 Fiscal 2010: July 2010 300,000 Fiscal 2011: July 2011 250,000 Fiscal 2012: February 2012 100,000 Fiscal 2015: October 2014 200,000 Fiscal 2017: January 2017 200,000 Fiscal 2018: July 2018 350,000 Fiscal 2019: July 2019 350,000 Fiscal 2021: July 2021 350,000 Fiscal 2022: February 2022 250,000 Fiscal 2022: August 2022 350,000 Fiscal 2024: August 2024 350,000 Total $ 3,300,000 31 Table of Contents The following table provides information regarding our share repurchases made under this program during the fourth quarter of fiscal 2024: Repurchase Activity Total Shares Purchased Average Price Paid Per Share (1) Total Shares Purchased As Part Of Publicly Announced Programs Remaining Authorized Share Repurchases (2) June 29, 2024 - July 26, 2024 250,757 $ 79.76 250,757 $ 51.6 million July 27, 2024 - August 23, 2024 — — — $ 401.6 million August 24, 2024 - September 27, 2024 — — — $ 401.6 million Total 250,757 250,757 (1) Average price paid per share excludes commission costs.
Biggest changeThe following table summarizes the initial amount of authorized repurchases as well as additional repurchases approved by our Board of Directors as of September 26, 2025 (in thousands): Date of Authorization Authorization Amount Fiscal 2010: November 2009 $ 250,000 Fiscal 2010: July 2010 300,000 Fiscal 2011: July 2011 250,000 Fiscal 2012: February 2012 100,000 Fiscal 2015: October 2014 200,000 Fiscal 2017: January 2017 200,000 Fiscal 2018: July 2018 350,000 Fiscal 2019: July 2019 350,000 Fiscal 2021: July 2021 350,000 Fiscal 2022: February 2022 250,000 Fiscal 2022: August 2022 350,000 Fiscal 2024: August 2024 350,000 Total $ 3,300,000 31 Table of Contents The following table provides information regarding our share repurchases made under this program during the fourth quarter of fiscal 2025: Repurchase Activity Total Shares Purchased Average Price Paid Per Share (1) Total Shares Purchased As Part Of Publicly Announced Programs Remaining Authorized Share Repurchases (2) June 28, 2025 - July 25, 2025 — $ — — $ 311.6 million July 26, 2025 - August 22, 2025 421,933 72.89 421,933 $ 280.8 million August 23, 2025 - September 26, 2025 57,428 73.95 57,428 $ 276.6 million Total 479,361 479,361 (1) Average price paid per share excludes commission costs.
Stock Price Performance Graph The following graph compares the total cumulative return of our Class A common stock with the total cumulative return for the New York Stock Exchange Composite Index ("NYSE Composite") and the S&P MidCap 400 Index ("S&P 400") for the five fiscal years ended September 27, 2024.
Stock Price Performance Graph The following graph compares the total cumulative return of our Class A common stock with the total cumulative return for the New York Stock Exchange Composite Index ("NYSE Composite") and the S&P MidCap 400 Index ("S&P 400") for the five fiscal years ended September 26, 2025.
The figures represented below assume an investment of $100 in our Class A common stock at the closing price of $63.79 on September 27, 2019, and in the NYSE Composite and S&P 400 on the same date and the reinvestment of dividends into shares of common stock.
The figures represented below assume an investment of $100 in our Class A common stock at the closing price of $64.99 on September 25, 2020, and in the NYSE Composite and S&P 400 on the same date and the reinvestment of dividends into shares of common stock.
As of October 25, 2024, there were 105 holders of record of our Class A common stock and 34 holders of record of our Class B common stock. The number of Class A beneficial stockholders is substantially greater than the number of holders of record since a large portion of our common stock is held through brokerage firms.
As of October 24, 2025, there were 109 holders of record of our Class A common stock and 32 holders of record of our Class B common stock. The number of Class A beneficial stockholders is substantially greater than the number of holders of record since a large portion of our common stock is held through brokerage firms.
Most recently, on November 19, 2024, we announced a dividend in the amount of $0.33 per share, payable on December 10, 2024, to stockholders of record as of the close of business on December 3, 2024.
Most recently, 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

90 edited+30 added−29 removed40 unchanged
Biggest changeOperating Activities Fiscal Year Ended September 27, 2024 September 29, 2023 Net cash provided by operating activities $ 327,252 $ 367,081 Net cash provided by operating activities decreased $39.8 million in fiscal 2024 compared to fiscal 2023, primarily due to the following: Factor Impact On Cash Flows Operating assets and liabilities â Lower inflows due to higher accounts receivable and lower non-current liabilities, offset by higher accounts payable and accrued liabilities Net Income á Lower restructuring charges, offset by lower revenue Investing Activities Fiscal Year Ended September 27, 2024 September 29, 2023 Net cash provided by/(used in) investing activities $ (286,292) $ 54,206 Net cash provided by/(used in) investing activities was $340.5 million lower in fiscal 2024 compared to fiscal 2023, primarily due to the following: Factor Impact On Cash Flows Business Combinations â Higher outflows due to business combinations Proceeds from Investments á Higher inflows from the sale of marketable investment securities 44 Table of Contents Financing Activities Fiscal Year Ended September 27, 2024 September 29, 2023 Net cash used in financing activities $ (287,814) $ (236,812) Net cash used in financing activities was $51.0 million higher in fiscal 2024 compared to fiscal 2023, primarily due to the following: Factor Impact On Cash Flows 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 Share Repurchases â Higher outflows due to higher common stock repurchases Purchase of non-controlling interest in business combination â Higher outflows related to acquiring a portion of the noncontrolling interest in our consolidated subsidiary Shares Repurchased for Tax Withholdings â Higher outflows due to higher fair value of shares withheld for taxes Common Stock Issuance â Lower inflows from employee stock option exercises Contractual Obligations and Commitments Naming Rights.
Biggest changeCash 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®.
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, Max, Paramount+, and other streaming partners and services internationally, continue to enhance content in Dolby Vision and Dolby Atmos.
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.
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 computer to a home media system), and AVRs, through the inclusion of our branded audio codecs, and increasingly through the inclusion of Dolby Atmos and Dolby Vision.
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.
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. OEMs 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.
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.
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.io.
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.
Dolby's presence in these browsers enables us to reach more users through various types of content, including streaming video entertainment. A number of personal computers 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.
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.
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 2024 and additional information regarding our stock repurchase program. Stock Repurchase Program.
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.
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 33 Table of Contents movies and TV, music and live sports, using Dolby branded technologies. Increased content in these areas increases our value proposition across our end markets.
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.
Licensing End Markets The following are highlights from our fiscal 2024 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.
" 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.
For the discussion and analysis highlighting comparisons of material changes in the consolidated financial statements for the years ended September 29, 2023 and September 30, 2022, 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 29, 2023, which is incorporated herein by reference.
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.
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 investment in Access Advance, and gains and losses on the sales of marketable securities from our investment portfolio.
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.
In addition, to the extent that our technology is not included in future industry standards, our revenue could be impacted. 35 Table of Contents 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.
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.
Key Challenges: 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.
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 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 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.
In connection with this plan, we recorded an expense in the third quarter of 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 the fourth quarter of fiscal 2024.
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.
In continuation with this plan, we recorded an expense in the first quarter of 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 the second quarter of fiscal 2024.
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.
For additional details regarding our leases, see Note 7 " Leases " to our consolidated financial statements. Purchase Obligations. Purchase obligations primarily consist of our non-cancelable commitments made under agreements to purchase goods and services related to Dolby Cinema and for purposes that include information technology and telecommunications, marketing and professional services, and manufacturing and other R&D activities.
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.
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.
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.
This discussion and analysis highlights comparisons of material changes in the consolidated financial statements for the years ended September 27, 2024 and September 29, 2023.
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.
The impact of these estimated savings on our operating expenses have been and will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses. In September 2023, we initiated a restructuring plan with the purpose of focusing our resources on our highest strategic priorities.
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.
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 at the later of when the sales occur based on our estimates or the completion of our performance obligations.
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.
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, pandemic or other worsening economic conditions could have a negative impact on our cinema-related revenue due to reduced consumer discretionary spending.
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.
Additionally, our revenue from patent pools is also impacted 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.
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.
As of September 27, 2024, we had $16.3 million remaining on these commitments, with $12.8 million due during fiscal 2025. 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 $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 27, 2024, we had $1.4 million remaining on these commitments, with $0.2 million due during fiscal 2025. 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 $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.
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. 38 Table of Contents 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.
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.
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.
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.
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 27, 2024, we had cash and cash equivalents of $482.0 million, which consisted of cash.
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.
Revenue from Dolby.io 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.
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.
In addition, we had long-term investments of $89.3 million, which primarily consisted of an equity method investment and an equity security without a readily determinable value.
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.
In fiscal 2024, Australia selected AC-4 as part of its new broadcast STB specification. 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.
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.
The following table presents selected financial information as of September 27, 2024 and September 29, 2023 (in thousands): September 27, 2024 September 29, 2023 Cash and cash equivalents $ 482,047 $ 745,364 Short-term investments — 139,148 Long-term investments 89,267 97,812 Accounts receivable, net 315,465 262,245 Accounts payable and accrued liabilities 364,909 372,324 Working capital 776,581 1,065,578 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.
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.
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. While each has had successes in fiscal 2024, they share certain challenges.
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.
For additional details regarding indemnification clauses within our contractual agreements, see Note 14 " Commitments and Contingencies " to our consolidated financial statements. 45 Table of Contents In fiscal 2024, 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.
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.
These activities resulted in gross pre-tax operating income savings of approximately $3 million in fiscal 2024 and are expected to result in savings of approximately $11 million within fiscal 2025.
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.
These include the current statutory rates in our domestic and foreign jurisdictions, the relative income earned in our foreign jurisdictions, and nonrecurring items such as changes to our unrecognized tax benefits that may occur in but are not necessarily consistent between periods.
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.
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.
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.
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).
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).
Key Challenges: Although the premium large format 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 36 Table of Contents ability to differentiate our offering and deploy new sites.
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.
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.
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.
As of September 27, 2024, we had an accrued liability for unrecognized tax benefits without interest, penalties, and related deferred tax assets, totaling $81.6 million. We are unable to estimate when any cash settlement with a taxing authority might occur and, therefore, have not reflected these anticipated future outflows in the table above.
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.
Upon receipt of royalty statements from the licensees with the 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 fees arrangements, that require the licensee to pay a fixed, non-refundable fee.
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.
Fiscal Year Ended Change September 27, 2024 September 29, 2023 $ % Sales and marketing $334,460 $354,364 $(19,904) (6)% Percentage of total revenue 26% 27% Category Key Drivers Compensation & Benefits â Lower costs of $9.3 million in payroll salaries due to lower headcount resulting from restructuring activities Tradeshows â Lower costs of $7.2 million primarily due to non-repeating events in the prior year Contractors â Lower costs of $4.6 million primarily due to lower patent litigation expenses Other á Higher costs of $5.0 million primarily due to larger marketing activations in the current 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 $ % 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.
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.
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.
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.
These activities resulted in gross pre-tax operating income savings of approximately $40 million within fiscal 2024, which was consistent with our expectations.
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.
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.
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.
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.
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.
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.
Fiscal Year Ended Change September 27, 2024 September 29, 2023 $ % General and administrative $270,392 $258,477 $11,915 5% Percentage of total revenue 21% 20% Category Key Drivers Legal, Professional, and Contractors á Higher costs of $6.9 million in legal and professional services largely due to M&A activities Other á Higher costs of $2.7 million in stock-based compensation expense, and higher depreciation expense 41 Table of Contents 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.
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.
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.
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.
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.
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.
Additionally, Polytron, an Indonesian TV OEM, launched a new TV that supports Dolby Atmos and Dolby Vision. Xiaomi announced new 4K QLED TVs that support Dolby Vision. Key Challenges: Our pursuit of new licensees and further adoption of our technologies by existing licensees may be impacted by a number of factors.
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 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.
These products allow us to offer exhibitors a more complete Dolby Atmos solution that is often more cost effective than other commercially available options.
Our revenue has been impacted by macroeconomic conditions, including but not limited to, inflation, heightened interest rates, rising costs of material, increased shipping costs, international conflicts, labor disputes, reduced discretionary consumer spending, and reduced new product investment by our customers. The macroeconomic conditions also impart substantial uncertainty into our operating environment, which presents additional challenges for our business.
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.
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.io is an early-stage business, and it is uncertain when or if it will be a material revenue driver.
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.
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 .
" 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 .
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.
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.
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.
" 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.
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.
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.
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 The current macroeconomic environment has negatively impacted many of our licensees and this directly impacts our financial results.
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.
Our patent licensing technologies are adopted broadly throughout the mobile device ecosystem, and we completed several important renewals this year, including with Vivo. 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.
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.
As in any technology licensing business, it is possible that changing partner preferences, consumer preferences, or other market dynamics could lead to adoption and use of alternative technologies. Revenue derived from our patent licensing programs also depends on the success of the patent pools in which we participate, which is driven by licensee, licensor, and program renewals.
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.
Fiscal Year Ended Change Other income/(expense) September 27, 2024 September 29, 2023 $ % Interest income $34,077 $28,086 $5,991 21% Other income, net 20,076 6,214 13,862 223% Total $54,153 $34,300 $19,853 58% 42 Table of Contents Category Key Drivers Other Income á Higher income from an equity method investment in the current year Interest Income á Higher yields on invested cash balance Income Taxes Our effective tax rate is based on our fiscal year results and is affected by several factors.
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.
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 and the impact on our business.
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.
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.
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.
We must continuously collaborate and maintain our key partnerships with personal computer manufacturers to incorporate our technologies, and we must continue to support the development and distribution of Dolby content via various ecosystems. To the extent that personal computer manufacturers do not incorporate our technologies in current and future products, our revenue could be impacted.
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.
Fiscal Year Ended September 27, 2024 September 29, 2023 Provision for income taxes $(48,163) $(48,409) Effective tax rate 15% 19% Factor Impact On Effective Tax Rate Tax Cuts and Jobs Act of 2017 â Current year benefit related to lower Transition Tax liability under the Tax Cuts and Jobs Act of 2017 resulting from the application of a recent Tax Court opinion in Varian Medical Systems, Inc. v.
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.
Fiscal Year Ended Change Licensing September 27, 2024 September 29, 2023 $ % Revenue $ 1,181,794 $ 1,197,930 $ (16,136) (1) % Percentage of total revenue 93 % 92 % Cost of licensing 67,204 64,890 2,314 4 % Gross margin 1,114,590 1,133,040 (18,450) (2) % Gross margin percentage 94 % 95 % Fiscal Year Ended Licensing Revenue By Market September 27, 2024 September 29, 2023 Broadcast $ 409,105 35 % $ 451,719 38 % Mobile 235,774 20 % 243,897 20 % CE 165,817 14 % 170,197 14 % PC 141,300 12 % 124,362 10 % Other 229,798 19 % 207,755 18 % Total licensing revenue $ 1,181,794 100 % $ 1,197,930 100 % 39 Table of Contents Factor Licensing Revenue Gross Margin Broadcast â Lower revenue primarily due to timing of minimum volume commitments in imaging patents, lower recoveries, lower true-up impacting foundational technologies and imaging patents, and lower STB unit shipments, partially offset by adoption of Dolby Vision and Dolby Atmos ßà No significant fluctuations Mobile â Lower revenue primarily due to timing of minimum volume commitments in our audio patent programs partially offset by timing of minimum volume commitments in our imaging patent programs and Dolby Vision adoption CE â Lower revenue from unit shipments, including lower true up, and timing of minimum volume commitments in imaging patents, partially offset by higher recoveries PC á Higher revenue from timing of minimum volume commitments in imaging patents, higher true-up, and higher recoveries Other á Higher revenue from imaging patent pool administrative fees and higher automotive revenue driven by adoption of Dolby Atmos, partially offset by lower gaming revenue driven by lower unit shipments 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.
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.
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.
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 Products and Services September 27, 2024 September 29, 2023 $ % Revenue $ 91,927 $ 101,814 $ (9,887) (10) % Percentage of total revenue 7 % 8 % Cost of products and services 73,292 87,676 (14,384) (16) % Gross margin 18,635 14,138 4,497 32 % Gross margin percentage 20 % 14 % Factor Products and Services Revenue Gross Margin Products â Lower cinema products revenue as compared to the prior year á Higher gross margin due to higher inventory reserve provision in prior year Services ßà No significant fluctuations ßà No significant fluctuations 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. 40 Table of Contents Fiscal Year Ended Change September 27, 2024 September 29, 2023 $ % Research and development $263,663 $271,523 $(7,860) (3)% Percentage of total revenue 21% 21% Category Key Drivers Other â Lower contractor spend, stock-based compensation expense, depreciation, salaries, bonus and other miscellaneous expenses 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 the protection of our IP.
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.
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 devices. The Xbox Series X and Series S gaming consoles support Dolby Vision and Dolby Atmos for streaming and gaming 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.
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.
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.
Quarterly Dividend Program. During fiscal 2015, we initiated a recurring quarterly cash dividend program for our stockholders. For fiscal 2024, quarterly dividends of $0.30 per share were paid on our Class A and Class B common stock to eligible stockholders of record.
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.
Finally, we face geopolitical challenges including changes in diplomatic and trade relationships, trade protection measures, and import or export licensing requirements.
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.
That disruption resulted in, and similar disruptions to movie production and exhibition in the future may lead to, decreases in box office receipts and our cinema-related revenue. 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.
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.
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 27, 2024, we had $79.4 million remaining on these agreements, with $13.1 million due during fiscal 2025.
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.
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. This year we, together with our patent pool partners, had success renewing existing licensees and increasing licensee penetration in established programs across multiple end markets.
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.
Additionally, our technologies continue to be incorporated into the latest headphones by various OEMs. In fiscal 2024, Alienware released 27 4K Dual Resolution Gaming Monitor that supports Dolby Atmos. Key Challenges : Our automotive related revenue growth will be impacted if OEMs do not incorporate our technologies in their latest products.
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.
Our stock repurchase program was approved in fiscal 2010, and since then we have completed approximately $2.9 billion of stock repurchases under the program. The Inflation Reduction Act and CHIPS and Science Act were signed into law in August 2022.
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.
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 2024 Sonos launched headphones that support Dolby Head Tracking with Dolby Atmos. Additionally, VIZIO announced integration of Dolby Atmos across its entire 2024 soundbar lineup.
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.

… 69 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−2 removed4 unchanged
Biggest changeFor additional information related to our foreign currency forward contracts, see Note 2 " Summary of Significant Accounting Policies " to our consolidated financial statements. A sensitivity analysis was performed on all of our foreign currency forward contracts as of September 27, 2024.
Biggest changeAs of September 26, 2025 and September 27, 2024, the total notional amounts of outstanding contracts were $195.9 million and $111.7 million, respectively. For additional information related to our foreign currency forward contracts, see Note 2 " Summary of Significant Accounting Policies " to our consolidated financial statements.
Additionally, a portion of our business is conducted outside of the U.S. through subsidiaries with functional currencies other than the U.S. dollar, most notably: • Australian Dollar • British Pound • Chinese Yuan • Euro • Polish Zloty As a result, we face exposure to adverse movements in currency exchange rates as the financial results of our international operations are translated from local currency into U.S. dollars upon consolidation.
Additionally, a portion of our business is conducted outside of the U.S. through subsidiaries with functional currencies other than the U.S. dollar, most notably: • Australian Dollar • British Pound • Chinese Yuan • Euro • Polish Zloty 46 Table of Contents As a result, we face exposure to adverse movements in currency exchange rates as the financial results of our international operations are translated from local currency into U.S. dollars upon consolidation.
We also enter into foreign currency forward contracts to hedge against assets and liabilities for which we have foreign currency exchange rate exposure and selected anticipated expenses. The contracts hedging receivables and payables are carried at fair value with changes in the fair value recorded to other income/(expense), net, in our 46 Table of Contents consolidated statements of operations.
We also enter into foreign currency forward contracts to hedge against assets and liabilities for which we have foreign currency exchange rate exposure and selected anticipated expenses. The contracts hedging receivables and payables are carried at fair value with changes in the fair value recorded to other income, net, in our consolidated statements of operations.
Foreign Currency Exchange Risk We maintain business operations in foreign countries, most significantly in Australia, China, Germany, Ireland, Poland, and the U.K.
Foreign Currency Exchange Risk We maintain business operations in foreign countries, most significantly in Australia, China, Germany, Ireland, Poland, and the United Kingdom ("U.K.").
The pre-tax effective portion of the gain reclassified to the consolidated statements of operations was $2.1 million in fiscal 2024, and the pre-tax effective portion of the loss reclassified to the consolidated statements of operations in fiscal 2023 was not material.
The pre-tax effective portion of the gain reclassified to the consolidated statements of operations in fiscal 2025 was not material, and the pre-tax effective portion of the gain reclassified to the consolidated statements of operations was $2.1 million in fiscal 2024.
A 10% increase in the value of the U.S. dollar would lead to a decrease in the fair value of our financial instruments by $4.4 million. Conversely, a 10% decrease in the value of the U.S. dollar would result in an increase in the fair value of these financial instruments by $4.4 million. 47 Table of Contents
Conversely, a 10% decrease in the value of the U.S. dollar would result in an increase in the fair value of these financial instruments by $4.3 million. 47 Table of Contents
We do not invest in financial instruments for trading or speculative purposes, nor do we use leveraged financial instruments. We utilize external investment managers who adhere to the guidelines of our investment policy. The investments within our fixed-income portfolio are subject to fluctuations in interest rates, which could affect our financial position, and to a lesser extent, results of operations.
We utilize external investment managers who adhere to the guidelines of our investment policy. The investments within our fixed-income portfolio are subject to fluctuations in interest rates, which could affect our financial position, and to a lesser extent, results of operations.
The gains and losses from the effective portions of cash flow hedges are recorded at fair value as a component of AOCI, until the hedged item is subsequently reclassified into earnings in the same period in which the hedged transaction affects earnings, with the corresponding hedged item.
The gains and losses from the effective portions of cash flow hedges are recorded at fair value as a component of AOCI, until the hedged transaction affects earnings. In the period when the hedged transaction affects earnings, the corresponding gains or losses of the cash flow hedge are recognized in the same line item in our consolidated statements of operations.
The pre-tax gain attributed to the effective portion of cash flow hedges recognized in AOCI was $4.9 million in fiscal 2023.
The pre-tax gain attributed to the effective portion of cash flow hedges recognized in AOCI was $1.0 million in fiscal 2025. The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $1.6 million in fiscal 2024.
This sensitivity analysis was based on a modeling technique that measures the hypothetical market value resulting from a 10% shift in the value of exchange rates relative to the U.S. dollar. For these forward contracts, duration modeling was used where hypothetical changes were made to the spot rates of the currency.
A sensitivity analysis was performed on all of our foreign currency forward contracts as of September 26, 2025. This sensitivity analysis was based on a modeling technique that measures the hypothetical market value resulting from a 10% shift in the value of exchange rates relative to the U.S. dollar.
Our investment policy is focused on the preservation of capital and support for our liquidity requirements. Under the policy, we invest in highly rated securities with a minimum credit rating of A- while limiting the amount of credit exposure to any one issuer other than the U.S. government.
Under the policy, we invest in highly rated securities with a minimum credit rating of A- while limiting the amount of credit exposure to any one issuer other than the U.S. government. We do not invest in financial instruments for trading or speculative purposes, nor do we use leveraged financial instruments.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity As of September 27, 2024, we had cash and cash equivalents of $482.0 million, which consisted of cash. In addition, we had long-term investments of $89.3 million, which primarily consisted of an equity method investment and an equity security without a readily determinable value.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity 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.
Removed
Amounts reclassified are recorded to the same line item in the consolidated statements of operations as the impact of the hedge transaction, concurrently with the hedged costs. The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $1.6 million in fiscal 2024.
Added
In addition, we had short-term and long-term investments of $80.9 million, which primarily consisted of equity method investments and equity securities without a readily determinable value. Our investment policy is focused on the preservation of capital and support for our liquidity requirements.
Removed
The contracts hedging foreign currency denominated operating expenses are carried at fair value with changes in the fair value recorded to other comprehensive income until the hedged expenses are reported in our consolidated statements of operations. As of September 27, 2024 and September 29, 2023, the total notional amounts of outstanding contracts were $111.7 million and $134.8 million, respectively.
Added
For these forward contracts, duration modeling was used where hypothetical changes were made to the spot rates of the currency. A 10% increase in the value of the U.S. dollar would lead to a decrease in the fair value of our financial instruments by $4.3 million.

Other DLB 10-K year-over-year comparisons