Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing fiscal first quarter results. During the presentation, all participants will be in a listen only mode. Afterwards, you will be invited to participate in a question and answer session. At that time, if you have a question, you will need to press * 1 on your telephone. As a reminder, this call is being recorded Thursday, February 2, 2023. I would now like to turn the conference call over to Maggie O'Donnell, Head of Investor Relations for Dolby Laboratories. Please go ahead, Maggie. Thank you. Good afternoon, thank you everyone for joining. Welcome to Dolby's first quarter 2023 earnings conference call. Joining me today are Kevin Yeaman, our Dolby Laboratories CEO, and Robert Park, our CFO. As a reminder, today's discussion will include forward-looking statements, including our second quarter and fiscal 2023 outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including, among other things, the impact of current macroeconomic events, COVID-19, supply chain issues, inflation, changes in consumer spending, and geopolitical instability on our business. A discussion of these and additional risks and uncertainties can be found in the earnings press release that we issued today under the section captioned Forward-Looking Statements, as well as in the Risk Factors section of our most recent quarterly report on Form 10-Q. Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events. During today's call, we will discuss non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial measures is available on our earnings press release and in the new interactive analyst center on the investor relations section of our website. Last quarter, we spent some time covering 2022, what we were seeing as we were going into 2023 with a focus on the long-term growth. Now we're one quarter into the year. Kevin, let's get started in our conversation. Can you start with giving us a take on your Q1 results? Yeah, of course. Thanks everybody for joining us today. I guess I'd start by saying it's nice to start the year with results coming in higher than what we expected when we came into the quarter. That's largely because we see some transactions landing earlier in the year than we originally expected. The underlying trends in our business are pretty consistent with what we thought coming into the year. There are, of course, some end markets that are a little higher, some that are a little lower. Robert will take us through all those details in just a moment. Like I said, You know, when I net all that out, pretty consistent with what we saw coming into the year. It's early in the year. We continue to be operating in an uncertain environment. We're gonna keep focusing on what we can control and what drives growth in the long term. Okay, great. Looking further ahead, how are you feeling about long-term growth? There continues to be strong demand from consumers for entertainment content, and demand for content to be more immersive and engaging, and that's what drives demand for Dolby experiences. This quarter, we continue to make progress on each of our key focus areas, movies and TV, music, user-generated content. We continue to be confident that we can double our revenues from Dolby Atmos, Dolby Vision, and imaging patents over the next 3 to 5 years, which means we continue to target annual growth of 15%-25%. Of course, our foundational audio technologies are essential to the ecosystem for entertainment audio. They're delivered across a very broad range of consumer entertainment devices. While that does make it sensitive to macro trends, it's a very strong position to be in. When the market settles down, we expect this to be a contributor to growth. Then, of course, we continue to be focused on the opportunity to bring the Dolby experience to an even wider range of use cases, and that's what we're doing with Dolby.io. Overall, we continue to be very confident in our long-term opportunity. That's great to hear. Just a few weeks ago, we were at CES in Las Vegas. What were some of the highlights for Dolby from your perspective? There were two big stories for us at CES this year, Dolby Atmos music and movies and TV in the living room. Let me start with music. We kicked off CES with a concert by Imagine Dragons, which was live in Dolby Atmos. It took place at Dolby Live in Las Vegas. Dolby Live is a venue where one of the things that is exciting about it is that we can engage with artists to create an experience that they wanna deliver. The result was that the energy and the excitement from the band and from the thousands of fans and partners who joined us was just fantastic. This is important because this is where the ecosystem starts for us. It is all about our ability to inspire creators to wanna create in Dolby. Artists' passion for Dolby Atmos continues to grow. We now have 85% of Billboard's top 100 artists in 2022 have one or more songs in Dolby Atmos. There's increasing availability of content on streaming services, so you can stream through Apple, Amazon, Tidal. There's MelOn in South Korea, Tencent in China. It's this combination of content and availability that's what creates the value proposition for the playback experience and our device partners. As I've shared before, the car experience is a big focus for us, and that's not just for us, that's the whole industry. It's very frequently the first question from artists, from music labels, from streaming services. They wanna know what the car experience is like. Consumers care deeply about that. Over the past year, we've added more than 6 car manufacturers, including Mercedes-Benz, Volvo, Lucid. At CES, Mercedes-Benz was featuring their electric SUV with Dolby Atmos Music. We had Mercedes-Maybach on hand at our booth. There were in-car entertainment partners like Bose. They were highlighting Dolby Atmos Music in their proof of concept cars. It's not just about automotive. You could experience Dolby Atmos Music in a number of form factors. Across the show floor, there were partners who were demoing the Dolby Atmos experience on sound bars, on wireless speakers, on mobile devices. When I step back, music today reminds me a lot of where we were with Dolby Vision in the movies and TV ecosystem not that long ago. It started with a handful of Warner Bros. movies. It started with, they were available on Vudu. You could experience them on LG and VIZIO TVs. We quickly broadened adoption to include partners like Netflix and Sony. If you scroll forward to today, we're deeply embedded across the movie and TV content ecosystem. Streaming is broadly available across all the major services, an increasing number of services, and Dolby Vision and Dolby Atmos are widely available across the TV market and other devices. We've built these ecosystems many times over the years, we have a pretty good sense of what signals to look for across content delivery and devices that tell us we're building momentum. That's what we're seeing with Dolby Atmos Music, we continue to be confident in the opportunity there. Great. You mentioned specifically movies and TV at CES. What stood out to you there? Well, with movies and TV, what was great about that was that our story was being told through the voice of our partners, and that this was across the show floor. As I talked about last quarter, a big focus of ours in that area is growing beyond the premium tier of televisions and expanding that deeper into their lineup. That's why it was so great to see announcements from partners like TCL. TCL announced that Dolby Vision and Dolby Atmos will now be included on all of their new 4K TV models in the U.S. Hisense is another great example. They announced several new TVs that are gonna include Dolby Vision and Dolby Atmos. It wasn't just TVs. Samsung and LG announced their new soundbar models with Dolby Atmos, and what was exciting about their announcements is that they're becoming a part of smaller form factors, Dolby Atmos is. This creates the potential for a broader audience and to expand the reach of Dolby Atmos. We continue to make progress on the content side as well, so we already have a very strong presence, and we also have added Peacock to the roster of streaming companies that are streaming in Dolby Vision. We talked about this last quarter, Maggie, the World Cup was available in Dolby Vision and Dolby Atmos, so that was exciting. Excited to share that Comcast will be broadcasting the Super Bowl on Fox in Dolby Vision next week. If anyone out there is throwing a Super Bowl party, it's not too late, and there is a Dolby page on the Amazon store which can point you toward all of our great partner products. That's great. What other highlights were there for the quarter beyond what happened and what was announced at CES? We haven't yet talked about mobile, and Dolby Vision Capture. You know, as we've talked about before, Dolby Vision Capture on mobile devices enables people to capture and share life's moments in a more realistic way on the device that we carry with us daily every hour of the day. We're focused on continuing to expand that value proposition. We're excited that Vivo this quarter adopted Dolby Vision capture and playback on its flagship phone. They join Apple and Xiaomi. Oppo launched its first phone with Dolby Atmos and Dolby Vision playback. We look forward to continuing to drive more momentum in mobile. We also haven't talked about Dolby.io, where we're focused on bringing Dolby to a far wider range of use cases. We're seeing more developers signing up for accounts. We are seeing strong growth in the number of active developers who are working with our APIs for the first time. What we're enabling these developers to do is to make day-to-day interactions in the apps and services that we're all using every day more immersive and more lifelike in how they sound and how they feel. Great. before I hand it over to Robert to go through the numbers, is there anything else that you wanna add in close on? Yeah. Well, if I take a step back again. This quarter I think further demonstrates that we continue to bring more Dolby experiences to more people around the world. There's an ever-increasing demand for content and for that content to be more engaging and immersive, and making that happen is what we do at Dolby. Continues to be uncertain environment, and that's not new. I mean, in a, in a lot of different ways, it's been an uncertain environment for a number of years now. What I'm most proud of is all that the team has been able to accomplish during this period. They've done it by staying focused on where Dolby can make a difference, and focused on where the biggest opportunities are. We're creating momentum across each of our ecosystems. We've launched entirely new ecosystems in the form of Dolby Atmos Music. We're just talking about user-generated content. The long-term trends point to more opportunity, and we come at this from a position of strength. We have a very strong financial position with strong cash flows, a solid business model. I'm confident that our foundational technologies will continue to be central to the entertainment experience for many years to come. We continue to grow the adoption of Dolby Atmos and Dolby Vision, and we're reaching more use cases with Dolby.io. We're gonna stay focused on raising the bar on all these experiences and growing the business. Great. Thanks so much, Kevin. Robert, before we get into all the details, I was thinking it would be helpful if you start out with some of the key things that investors and analysts should be focused on, in our results. Thanks, Maggie. Before we get into the details, I wanted to point out three main highlights. First, total revenue of $335 million was higher than the guidance that we provided last quarter, largely due to transactions closing earlier in the year than anticipated and higher products revenue. As it relates to trends in our underlying business, we are on track with where we thought we would be coming into the year overall. We came in a little higher than expected in broadcast and gaming, mostly driven by higher Q4 shipments than we had estimated. Lower in PC, driven by further weakness in the market, and lower box office proceeds, which negatively impacted Dolby Cinema revenues. Operating expenses of $175 million on a non-GAAP basis were lower than we had guided for the quarter, which is mostly due to timing of marketing and patent program spend and lower labor costs. We will continue to be deliberate about our hiring, evaluate our long-term priorities and opportunities, and make spending adjustments accordingly. I'm gonna talk about guidance in detail in a few minutes, but based on where we're seeing today, our outlook for the full year is consistent with what we said last quarter. It's nice to start the year with a quarter that came in better than our expectations, but at the same time, it's still early in the year, and we continue to operate in a very uncertain environment. With that as the backdrop, let's get into the Q1 details. Q1 revenue was down 5% year-over-year, primarily due to mobile, PC, broadcast, and consumer electronics, consistent with the overall trends in the market. This was partially offset by adoption of Dolby Atmos and Dolby Vision and higher products and services revenue. Q1 was comprised of $308 million in licensing revenue and $27 million in products and services revenue. Now let's talk about licensing revenue by end market. As a reminder, our licensing business is based on unit shipments. In general, we estimate revenues from unit shipments each quarter and true it up the following quarter based on actual reported unit shipments from our partners. We also have transactions that reflect revenue from units shipped in prior periods, which we call recoveries, and transactions where the customer will commit to minimum volumes for a given period, where all or a portion of the revenue is recognized upfront. These transactions are all related to unit shipments. The only difference is the timing and amount of revenue in any given quarter. The timing of these transactions can vary depending on a number of internal and external factors. Broadcast represented about 38% of total licensing in Q1 2023, down $4 million or 4% on a year-over-year basis, driven primarily by lower TV unit shipments and lower recoveries. This was partially offset by the Q4 true-up for TVs and higher revenue from Dolby Atmos and Dolby Vision. Mobile represented about 21% of total licensing in Q1 '23, down $11 million or 14% on a year-over-year basis, as the prior year benefited from timing of revenue from minimum volume transactions and also lower units. This was partially offset by increased adoption of Dolby Atmos and Dolby Vision. Consumer electronics represented about 18% of total licensing in Q1 of '23, down $2 million or 4% on a year-over-year basis as the prior year benefited from higher recoveries, which is partially offset by increased adoption of Dolby Atmos and Dolby Vision. PC represented about 8% of total licensing in Q1 '23, down $10 million or 30% on a year-over-year basis, driven by lower recoveries and lower PC unit shipments. Other markets represented about 15% of total licensing in Q1 of 2023, up $4 million or 8% on a year-over-year basis, driven by a favorable Q4 true-up in gaming. This was partially offset by lower box office proceeds from Dolby Cinema. Beyond licensing, our products and services revenue were $27 million in Q1 of 2023, up 39% on a year-over-year basis. The year-over-year increase was driven primarily by higher cinema product sales. We also saw growth in Dolby.io. Let's turn to expenses and margins. Total non-GAAP gross margin in the first quarter was 90% compared to 91% in the first quarter of fiscal year 2022. Gross margins came in lower, driven by a higher mix of products revenue. Non-GAAP operating expenses in the first quarter were $175 million compared to $195 million in the first quarter of fiscal year 2022. The decrease was driven by lower labor costs as we had an extra week last year, lower head count, and favorable FX. Program marketing spend was also lower due to timing of campaigns in the prior year compared to this year. We benefited from lower bad debt expense compared to the prior year. Non-GAAP operating income for Q1 was $126 million, or 38% of revenue, compared to 36% of revenue in Q1 of last year. Non-GAAP income tax in Q1 was within our guidance range at 19%, compared to 18% in the last year's Q1. Net income on a non-GAAP basis in the first quarter was $107 million, or $1.11 per diluted share, compared to $104 million, or $1.01 per diluted share in Q1 2022. During the first quarter, we generated $56 million in cash from operations, compared to $31 million generated in last year's first quarter. We ended the first quarter with approximately $900 million in cash and investments. During the quarter, we bought back about 700,000 shares of our common stock and ended the quarter with $311 million of stock repurchase authorization available going forward. We also announced today a cash dividend of $0.27 per share. The dividend will be payable on February 22, 2023 to shareholders of record on February 14, 2023. Let's move on to guidance. We continue to operate in a challenging and uncertain environment. For fiscal 2023, we continue to expect that our foundational audio revenue will decline mid-single digits year-over-year, reflecting lower unit shipments, particularly in PC, TV, consumer electronics, and mobile. We are still targeting 15%-25% growth in Dolby Vision, Dolby Atmos, and imaging patents. We expect this to be driven by growth in broadcast, mobile, and other markets. This would more than offset the declines in foundational audio that we are expecting. With these assumptions, we continue to project that total revenue for fiscal 2023 will grow low single digits year-over-year. Within this, we anticipate licensing re-revenue to be up low single digits with growth in mobile, broadcast, and other markets, outpacing the decline in PC and consumer electronics. Products and services revenue expected to grow low double digits. In terms of the full year split, given more transactions are expected to close earlier in the year than anticipated, we currently expect revenue in the first half to be higher than the second half, closer to last year's split. We still expect that non-GAAP operating expenses will increase roughly 2% compared to prior year, and expect operating margins of roughly 30% on a non-GAAP basis for the year. We will continue to be disciplined with our spend, review our resource envelope and allocations on a regular basis, and evaluate the need to make adjustments based on the economic realities of the business. We anticipate that non-GAAP earnings per share could grow at a slightly higher rate than revenue. Now let's move on to guidance for the second quarter. Q2 revenue is expected to range from $340 million-$370 million. Within that, licensing revenue is estimated to range from $320 million-$345 million, while products and services revenue is projected to range from $20 million-$25 million. Compared to Q2 of last year, we expect growth in Dolby Atmos, Dolby Vision, and imaging patents, particularly in broadcast and mobile, to more than offset lower foundational revenue, driven by lower unit shipments estimates in consumer electronics, PC, and TVs, and lower recoveries. Non-GAAP gross margin is estimated to be 89% ±. Operating expenses in Q2 on a non-GAAP basis are estimated to range from $193 million-$203 million, as we expect certain marketing and patent program expenses to shift from Q1 to Q2. Our effective tax rate for Q2 is projected to range from 19%-20%, 21% on a non-GAAP basis. We estimate that non-GAAP Q2 diluted earnings per share could range from $0.90-$1.05. In summary, it's a good start to the year, as Kevin said. It is still early days, and we continue to navigate through an uncertain environment. That said, we remain laser-focused on the things we can control and are excited about the progress we are making on the long-term growth opportunities ahead. While the economic realities around us continue to change, the fundamentals of Dolby's durable business model of high gross margins, healthy cash flows, and a strong balance sheet have not changed. Great. Thank you, Robert. Operator, I think we're ready to turn it over to questions. Absolutely. If you wish to register a question for today's question and answer session, you may do so by pressing * one. If you would like to withdraw your question, press * two. If you are on a speakerphone, please pick up your handset before entering your request. Please be sure to identify yourself and your firm at the outset. To be fair to all participants, we ask that you limit yourself to one question and a follow-up question until all participants have had a chance in the first round. If time allows, we will then come back to answer any remaining questions. One moment, please, for the first question. Your first question comes from Steven Frankel with Rosenblatt. Please proceed. Thank you. Kevin, congratulations on the Super Bowl. That's a long time coming. That's a big win. Maybe start with what do you think finally tipped Comcast and Fox to do this? Well, I think as with, you know, all of our big wins, this has been, you know, a journey from the team. You start off with movies and TVs. You know, for movies, you have 3 months to produce, and for, you know, TV shows, you have days to weeks to months. Then we get started on live sport. Obviously, you have a matter of seconds. It's a combination of engaging with the community. It's working through all the technical demands. It's working the mixers or the creators, and then, of course, it's always working through all of the business arrangements that go far beyond just Dolby. There's all the rights and all the other things that are going on. We're just super pleased to have the Super Bowl coming right after, you know, World Cup just not long ago. This is the kind of thing that we think really broadens the demand for the Dolby experience. Okay. On the notion that you had some minimum pay contracts that were signed earlier in the year than you expected, was there any strategic reason for that to happen? Or was this just it's hard to tell when those are coming in and they just came in? Any kind of characterization you can give us. I think it's more the latter than the former, Steve. Remember that our transactions, we have two types. There's the minimum volume commitments like you just pointed to. There's also recoveries for best practice. Those are both types of transactions we have, you know, we do our best to predict when those are gonna sign throughout the year. You know, some of those landed earlier this year, which is a, you know, it's a nice way to start, I think it'd be too early for me to draw any particular trends from that information. Okay. One I'm gonna sneak one more in. This probably is gonna be difficult for you to answer, but let me try. Obviously, you have one large TV maker. You have one large TV maker that's yet to get the Vision religion. You have a lot of others that have. In, you know, everybody outside the one, where do you think you are in your ultimate penetration? In 2023, are you 70% there? Are you not even that high yet? Well, I think, obviously, we're patient and persistent. One thing we do is we are always looking to continue to increase the value that we're providing. We, you know, we just talked about the Super Bowl coming up, the World Cup. That's another example how we will be hard at work increasing the value proposition to, you know, to bring as many partners on board as we can. What we talked about coming into the year in terms of increasing the attach rate is we have a very strong presence at the premium end of our partner lineups, and we're really looking to drive that all the way through their 4K lineups. That's why that's the significance of an announcement like TCL's, where all of their 4K models going forward in the U.S. will be Dolby Vision and Dolby Atmos. We also feel like we have an opportunity to increase penetration as it relates to the big box retailers and some of the house white label brands that they have. We still think there's room to grow, Steve. It was, as you know, you know, one of the biggest drivers of the strong growth in Dolby Vision and Dolby Atmos last year, and we continue to see it be a big growth driver this year. Okay. Thank you. I'll jump back in the queue. Thank you. The next question comes from the line of Paul Chung with J.P. Morgan. Please proceed. Hey, guys. Thanks for taking my questions. I know you mentioned it briefly, but if you could talk about kind of the traction and, you know, momentum you saw at CES, particularly for Atmos in the car and for IO. You know, have you seen some uptick in interest from other auto OEMs and app developers? I guess I know it's early days, but how do we think about sizing, you know, Atmos in the car, in terms of both kind of a reasonable auto penetration rate and respective ASPs for car, kind of in both the near term and long term? Sounds like a pretty interesting opportunity. You know, as it relates to music, I think what was really fun about CES for us this year was the opportunity to really tangibly demonstrate the entire ecosystem. You know, starting with a concert in Dolby Atmos, having all of our partners there throughout the ecosystem, punctuated of course by the ability for people to actually experience Dolby Atmos music in the Mercedes-Benz and at some of the partner booths, like what Bose had going on. That yes, there's a lot of great momentum there. We had a lot of engagement going into CES, and we have very strong engagement coming out of CES. The team is, you know, busy at work working with major players from throughout the ecosystem, throughout the industry, and working with them on their plans. It was a very good show for Dolby Atmos Music. I think it was the highlight of our show, really. We also did have a Dolby.io presence. We were demonstrating in fact, some of our customers and developers were demonstrating what they have built with Dolby.io. That was a nice opportunity for us to I guess cross-pollinate, if you will. Some of our partners from the broad ecosystems that we serve and give them an opportunity to see what we're doing with Dolby.io. We had a lot of partners that were using both real-time streaming and our ability to have audio/video interactions with large audiences and sophisticated spatialization. I think that what we continue to be excited about is we feel like we're still at the early stages with the companies that are looking to build the next generation virtual experiences of, you know, the future. You know, to be clear, that, you know, at its most immersive, that can be in a headset environment, but these are experiences that are largely gonna be enjoyed on PCs and mobile devices, and with IO, developers can build those experiences. Yes, we did have customers there that were demonstrating some of those experiences, and it sparks ideas of what our other partners might want to be able to do in the future. Gotcha. Thanks for that. The OpEx guide was reiterated, you know, up modestly for the year. Where do you kinda see some flexibility for, you know, additional cost execution, maybe on the SG&A line? On R&D, where are you kind of putting new investments to work? You know, how do we think about the spend related to Atmos, Vision, IO? Are those kind of ongoing expenses, or bulk of those costs are behind us and it's kind of new innovations that you're investing in for the most part? The first thing I would say is that we endeavor to be, and are, very dynamic in our allocation of resources. We're regularly shifting resources between initiatives, and it relates to Dolby Atmos and Dolby Vision. That includes shifting resources between ecosystems that are getting more mature to newer ecosystems. While the headline number is the increase of about 2%, underneath that, we are constantly moving people and resources to where the biggest opportunities are of the future. Gotcha. lastly- By the way, Paul. On cinema- You asked so many questions the first time, I think, I feel like I just remembered that I feel like I forgot part of it. Which is to just say that our. You know, we've said our goal is for, we would like Dolby Atmos Music to be the way everybody experiences music all the time, everywhere, and on every car. You know, we aim that we aim high and we stay focused on building these ecosystems. You know, we have a track record of being able to get to some pretty high adoption rates, but we, you know, we set our sights on being relevant to all the ways people enjoy music. Yeah. That, I thought the demo was excellent. On, on cinema, you know, where are you in terms of footprint today? You know, are there expectations to kind of expand after some pauses here, maybe with other partners? Talk about the expectations for kind of contribution from this business on maybe an annual run rate business and margin profile would be very helpful. Thank you. To answer your first question, we're at 200. $287. ... 87 Dolby Cinema screens. I think we added 7. Is that right, Robert? Added 5. Added 5. The new screens coming online is still, you know, lower than pre-pandemic. You know, that's still an industry, obviously, that is also subject to all the uncertainties in the world, they're in varying positions as it relates to their ability to invest right now. I think, you know, Avatar was a big win for the industry. A lot of that will be Q1 box office, it was great to see that. Our partners are still engaged. They're still thinking about the future. We do see an opportunity to continue to expand, because we think that what has held true throughout this period of time is that more, a greater percentage of people who are going to the movies are wanting to have the most immersive experience. The premium experiences are getting a greater share of the box office. We continue to have strong engagement as people are thinking about their future plans for how they, you know, grow their portfolio of high-end experiences. Thank you so much. Today, I can see the other part of your question. Today, that's, as you know, the Dolby Cinema is a share of box office. That's part of our other markets licensing revenue. not breaking that out separately yet. That's still in the other category. Okay, great. Thank you. Thank you. Thank you. you. The next question comes from the line of Ralph Schackart with William Blair. Please proceed. Good afternoon. Thanks for taking the question. Within products revenue, with the strong growth there, you called out IO as contributing to that growth. Just curious if you'd sort of give us a sense of the contribution there. I'm sure you don't wanna break out the exact number, but just perhaps some relative contribution or growth rate or any sort of context you could add there, it'd be great. Hey, Ralph. Yeah, most of that growth came from cinema products, if you will. There was some growth in IO. The majority of the growth came from cinema products. You know, through, you know, higher supply of Of servers and storage that we have, but also increased demand for some of our audio processors and other equipment. Okay. Just, you know, kind of turning to the macro, it sounds like so far where we are, early in January, it's playing out as you expected, I guess, which is good in terms of the way you guided. You obviously have a lot of global customers, but as you talk to them as you look through the year, maybe just give us some perspective on sort of what they're thinking on the macro. You know, is it sort of the same? Is it marginally, you know, worse, any better, any pockets that maybe have changed, as you look forward since somewhat since last call? Well, it very much depends on the partner, but I would say the one word that would come up consistently and that I've probably already said 12 times is uncertainty. I mean, it is an uncertain environment. I wouldn't go so far as to say there haven't been any changes, it's just that as far as our guidance goes, there have been some end markets and partners that have seen things a little that have been a little better than what we estimated coming into the year, and some that have been a little to the downside. Net-net, as a portfolio across all of these devices and ecosystems, we see the underlying business at about where we saw it coming into the year. Okay. Thanks, Kevin. I think Robert said at the outset, specifically, we saw for the first quarter, we saw broadcast and gaming come in a little higher. Q4 shipments were a little higher than we'd estimated. I would say, you know, PC, we already saw unit shipment weakness coming into the year, might be just, you know, slightly lower than the continue to soften a bit. Box office for Q4 was light. Again, a lot of Avatar will benefit Q1. I think mobile unit shipments are down, and we've seen a lot of news around that in this earnings cycle so far. You know, we saw units coming down to the year. Also we, as we've said before, minimum volume commitment arrangements are more prevalent in our mobile space, which maybe makes us a little less sensitive than we might otherwise be on a quarter-to-quarter basis. Of course, we have a pipeline that we're working for things like our user-generated content value proposition and other use cases on the mobile phone. Okay. Thanks for the extra color. Thank you. The next question comes from the line of Jim Goss with Barrington Research. Please proceed. Thanks. One question related to the Dolby Atmos Music. You mentioned the live event that involved Imagine Dragons. I was wondering, to the extent that Dolby Atmos is striving to recreate a live experience, what exactly did it add to the live event? Well. Let me back up a minute. Dolby Live is, you know, that running all year round. It tends to have top artists who are doing residencies. They can be, you know, shorter or longer residencies, but they tend to be doing more than one performance, which is great for us because they're investing that much time. It also, you know, creates the opportunity to invest more time in thinking about Dolby Atmos and what can be done with Dolby Atmos. At that large scale, it's about, you know, creating that spatialization and that Dolby Atmos experience where you are immersed in the performance. That's what we do at Dolby Live. Depending on the performance, that could be a combination of the pre-recorded backtracks, but it is also the live, and that means working with the mixers so that they know what the artist wants and making that happen in real time. The other thing that is spectacular about it is that you really do get that experience wherever you are in that arena. That is something that people really notice compared to other environments. For us, again, it's just, it's this opportunity to engage with each of these top name artists who are coming through Dolby Live throughout the year. It's an opportunity to have, you know, 5,000 or so fans each night get exposed to Dolby Atmos Music. Yeah, it's a great showcase for Dolby Atmos. Okay. If, how are you thinking in terms of the primary monetization avenues for Atmos, you know, for music? Mm-hmm. Will involve the PCs or phones, or what type of devices do you think you're going to get the greatest revenue generation from with this particular application? Well, I'm gonna start by saying yes and yes. We're looking to improve the experience on all the devices that people enjoy music on. I would say the focus that stands out at, you know, today is the car. As I said earlier, the entire industry is passionate about that experience and automobile manufacturers are always looking to push the boundaries on that experience. We've got great engagement across the industry, as you've seen from our wins over the last year and a half. Automotive is a big focus of ours. You around the show floor and of course at our booth, you could also experience Dolby Atmos on soundbars, phones, all the ways you listen to music, we would like to bring Dolby Atmos to that experience. Okay. One other thing, to the extent that there are some TV price wars as they attempt to monetize their smart TV features, is there any impact you can talk about with Dolby including any included features or upgrade generation from those types of devices? Well, what I will say, I guess, is that we are, you know, as I said, a big focus of ours is bringing Dolby Vision and Dolby Atmos deeper and deeper into lineups. You know, the fact that you can now get a Dolby Vision, Dolby Atmos experience for, I wanna say, I think $250 probably at the low end, don't know if I'm exactly precise on that, so you can check the Dolby page on Amazon on that. That's good for us. Obviously, the more we get into those lower price points, the broader the audience for Dolby Vision and Dolby Atmos, and the more momentum that we can build because, you know, awareness of how great the experience is and word of mouth and more availability, all of that is what helps to build momentum in each of these ecosystems. Okay. That's good. The penetration in the television area is running its course pretty well. You're pretty deep into those SKUs. Sorry, Jim. I didn't hear that fully, but I think you asked whether I thought that was going well. Like I said, I mean, the Dolby Vision and Dolby Atmos in the living room, which, you know, TV being the primary device, there is our largest driver for Dolby Atmos and Dolby Vision last year, again, we see that as a big driver this year of our growth in those areas. All right. Thank you very much. I'm sorry, if I missed a part of your question, you can repeat it. That didn't come through clear. No, that's okay. I'll play it in. Thank you. There are no additional questions at this time. That concludes the Dolby Laboratories conference call discussing fiscal first quarter results. Thank you. You may now disconnect your line.