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. If you have a question during this time, please press star one. As a reminder, this call is being recorded Thursday, February 1, 2024. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead. Good afternoon. Welcome to Dolby Laboratories first quarter 2024 earnings conference call. Joining me today are Kevin Yeaman, Dolby Labs CEO, and Robert Park, our CFO. As a reminder, today's discussion will include forward-looking statements, including our fiscal 2024 second quarter and full year 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, ongoing supply chain issues, inflation rates, 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 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 in our earnings press release and in the Interactive Analyst Center on the investor relations section of our website. With that, I'd like to turn the call over to Kevin. Thank you, Peter, and thanks to everyone for joining us today. Revenue for the quarter came in about where we expected, and earnings were better than we expected. Our guidance for the full year is unchanged, and Robert will share detailed guidance for the second quarter in a few minutes. Today, I'd like to cover three topics. First, I'd like to make some brief comments on the macro environment. Second, I'd like to talk about our business and the momentum we are seeing in Dolby Atmos and Dolby Vision. And third, I'll wrap up my portion of the call with some brief closing thoughts. So first on the macro, not much has changed. Spending on consumer electronics is the largest factor impacting our foundational offerings. We aren't seeing anything that would cause us to change our FY24 guidance for mid-single-digit declines in foundational licensing revenue. As it relates to Dolby Atmos and Dolby Vision, we continue to have strong engagement across creators, distributors, and device manufacturers, and we remain comfortable with our full year guidance for high single-digit growth for Dolby Atmos and Dolby Vision. Over time, we continue to expect foundational to return to low single-digit growth and Dolby Atmos and Dolby Vision and imaging patents to grow at a 3- to 5-year CAGR of between 15% and 25%. So let me turn to the business. Today, I will focus on Dolby Atmos and Dolby Vision, which are the biggest components of our growth opportunity in the midterm and an important part of the path to returning the company to double-digit growth over time. We look at the opportunity with Dolby Atmos and Dolby Vision primarily through the lens of market ecosystems, which is the intersection of device, distribution, and content. Our primary focus for new wins in automotive is with Dolby Atmos music. For TV, it is TV shows, including sports and movies, and for mobile, it is videos via user-generated content. In each ecosystem we serve, we focus on enabling great content, which gives us the opportunity to grow our OEM partnerships. The real value of an OEM partnership is realized over years and decades as our partners adopt more of our technology and put our technology on more of their devices. I share this perspective with you to help you understand why we remain so excited about ongoing momentum in the creative community and confident and optimistic about the long-term opportunity for our business. If you recall, last quarter we described the virtuous cycle of Dolby Atmos and Dolby Vision. We work with creators and distributors to create high-quality content in Dolby, so that when consumers buy Dolby-enabled devices, they enjoy a more engaging and immersive audio and visual experience. The virtuous cycle for Dolby is, as more devices support the Dolby experience, the more content creators want to create in Dolby and the more distributors want to deliver that content. On the creator and distributor side of the cycle, we continue to see very strong adoption of Dolby Atmos and Dolby Vision. Artists continue to leverage Dolby for their best work. We are in the midst of award season, and the breadth of Dolby adoption and momentum is clear through this lens. Every nominee for Record, Album, Song, and New Artist of the Year for the 2024 Grammys used Dolby Atmos. 92% of the Billboard 2023 year-end top 100 artists are available in Dolby Atmos, and over 100 shows in Dolby Technologies were nominated across the Emmys and the Oscars, including Emmy winners, Succession and The Last of Us. We continue to increase the availability of Dolby content through distribution partners, including ZEE5, an Indian OTT service with 120 million monthly active users, which announced Dolby Vision support on its platform shortly after adding support for Dolby Atmos earlier in 2023. These highlights reinforce the momentum Dolby Atmos and Dolby Vision have in the artists and streaming communities in their quest to deliver the best audiovisual experiences possible. We are focused on making these experiences available on as many devices as possible. We've just returned from CES, where Dolby Atmos and Dolby Vision were on full display across the show floor, particularly in the living room, in devices like TVs and soundbars. We continue to be featured in lineup announcements from our partners, including TCL, LG, and Hisense. We also had strong engagement with Dolby Atmos FlexConnect, our new living room solution that enables consumers to place wireless speakers paired with a TV anywhere in a room and automatically get an immersive Dolby Atmos experience. Hisense announced that they would begin supporting Dolby Atmos FlexConnect on their TVs. In gaming, Alienware and ASUS, two of the world's leading gaming monitor manufacturers, announced support for Dolby Vision. A big focus of the show for us was our growing presence in auto. We enjoyed positive reactions from our Dolby Atmos-enabled demo car, which delivers a fully immersive Dolby Atmos experience in an affordable mid-size car with a standard 4-channel, 8-speaker sound system. In addition, Apple recently announced support for Dolby Atmos in CarPlay, broadening our market opportunity by enabling auto OEMs to offer consumers multiple ways to experience Dolby Atmos in their cars. On the OEM side, as of the end of the first quarter, we've announced agreements with 13 auto OEMs, up from 10 at the end of the fourth quarter. One of our new partners this quarter is Zeekr, the premium EV brand of Chinese automaker Geely. They announced that the Zeekr 007, which is expected to retail for less than $30,000, will support Dolby Atmos, and they're going to be doing that by an over-the-air update later this year. Interestingly, about half of our OEM partnerships are with Chinese EV manufacturers, which are quickly becoming some of the most popular cars on the road in China and Europe. We're also excited that the Apple Vision Pro, which begins shipping tomorrow, will include Dolby Atmos and Dolby Vision. We believe Apple's spatial computing environment with Dolby Atmos and Dolby Vision will continue to expand the horizons of what is possible with sight and sound. To sum up on Dolby Atmos and Dolby Vision, we continue to make progress on multiple fronts. This progress gives us confidence in our expectation for a multi-year CAGR of 15%-25% for Dolby Atmos, Dolby Vision, and imaging patents. Looking beyond Dolby Atmos and Dolby Vision, we've talked to you about our opportunity with Dolby.io, where we are focused on enabling more engaging, real-time, and personalized experiences in sports and entertainment. We are seeing strong demand for our ultra-low latency, real-time streaming product, and while it's early days, we just closed our first seven-figure deals. I'd like to wrap up my comments with some closing thoughts. It was a solid quarter, and our outlook for the year is unchanged. Looking forward, our foundational offerings remain strong, and we have momentum with Dolby Atmos and Dolby Vision. We continue to invest in innovation and attractive new areas of growth, including Dolby.io, and we have a strong margin profile with healthy cash generation. All of this gives us confidence in our opportunity to grow revenue and earnings going forward. With that, I'll turn it over to Robert. Thanks, Kevin. Before we get to the detailed financials, I'd like to share three thoughts. First, revenue for Q1 was within the range we laid out in the Q4 earnings call, and profitability came in higher than guidance, primarily due to timing of spend. Second, while the environment remains uncertain, our guidance for the full year remains unchanged. Third, as I've said before, we feel good about our long-term prospects as our value proposition remains strong and our financials are solid. Q1 revenue was $316 million, down 6% compared to the year ago quarter and just above the midpoint of guidance we shared with you on the last earnings call. Licensing revenue of $294 million was down 5% year over year. Products and services revenue was $22 million, down 19% year-over-year, driven by lower cinema product sales, and came in lower than expected due to timing of orders now expected later in the year. Detailed licensing performance by end market is on our IR website, but I'd like to point out some noteworthy details. As a reminder, timing of recoveries, minimum volume commitments, and true-ups can drive volatility between quarters, and we saw that dynamic in mobile this quarter, as we expected. In Q1, mobile revenue was down about 45% year-over-year due to these factors, but we still expect mobile to be down only slightly for the full year. Our end market outlook for the full year is unchanged from last quarter's call. We continue to expect solid growth in other markets, and PCs should benefit from slightly higher units, higher revenue in imaging patents, and recoveries. This increase will be offset by slight declines in broadcast, CE, and mobile. While we see growth in Dolby Atmos and Dolby Vision in these markets this year, the overall revenue declines are primarily due to tough comps in terms of timing and size of deals, and true-ups in foundational imaging patents. Moving to the bottom line. In Q1, we earned $1.01 per diluted share on a non-GAAP basis, above the high end of our guidance, primarily due to lower operating expenses related to timing of patent program spend, higher other income, and lower taxes. We generated $8 million in operating cash flow. As a reminder, over time, operating cash flow will correlate to non-GAAP net income, but this quarter, we had a variety of timing issues working against us. Moving on. We repurchased $80 million of common stock and have $132 million remaining on our repurchase plan authorization. We declared a $0.30 dividend, up 11% from our dividend a year ago, and ended the quarter with cash and investments of just under $900 million. We recorded a $6 million non-GAAP restructuring charge in the quarter, in line with the restructuring plan we communicated last quarter and completed in November. Turning to guidance. There is still uncertainty in the market, and our guidance assumes no material change in the macroeconomic environment. While we continue to see steady growth of content created and distributed in Dolby technology and strong engagement from our partners, device shipments remain soft, and things are just taking longer to get done. For Q2 2024, we expect revenue to be between $345 million and $375 million. Within that, licensing revenue is estimated to range from $320 million to $350 million. Gross margin should be approximately 90% on a non-GAAP basis. We expect non-GAAP operating expenses to be between $180 million and $190 million. Our effective tax rate for Q2 is projected to be around 20% on a non-GAAP basis. So as a result, we estimate that non-GAAP EPS should be between $1.14 and $1.29 per diluted share. Our full year guidance for fiscal year 2024 is unchanged at roughly flat revenue. Embedded in this guidance is an assumption of a mid-single-digit decline in foundational audio licensing revenue, offset by high single-digit growth in Dolby Atmos, Dolby Vision, and imaging patent licensing revenue, and flat product and services revenue. Non-GAAP gross margin should be roughly 89%. Non-GAAP operating expenses for the full year should be in the $740 million-$750 million range, which will result in about a 1-2 percentage point improvement in operating margins on a full year basis. On the bottom line, we are expecting non-GAAP EPS between $3.60 and $3.75 per diluted share. To wrap things up, the creation and distribution of Dolby-enabled content continues to grow nicely. Our partners are still very engaged, our financials remain strong, and we're well-positioned for growth when economic conditions improve. With that, I'd like to turn it back to the operator to open the line for your questions. Operator? Thank you. If you have a question, please press star one on your telephone keypad. Your first question comes from the line of Ralph Schackart with William Blair. Your line is open. Good afternoon. Thanks for taking the question. Kevin, maybe kind of go back to some of your introductory comments on macro. I think you had talked about so the macro being the same as last call, but maybe just kind of taking a step back as you look out into 2024 this year, and if you compared, you know, where you are today versus if you looked out into 2023. Maybe just sort of give an assessment of the relative macro, I guess, this year versus, you know, last year when you were looking out. Yeah, thanks for the question, Ralph. So, of course, as it relates to our foundational revenues, the biggest macro factor is the number of device shipments, and as we said, we haven't seen anything that would cause us to change our outlook for that. As it relates to kind of the overall environment, which you're referring to, I would remind you that, you know, what we didn't say that we saw a couple of big deals delayed. What we did see was that it's been a couple of years of, you know, an uncertain and changing kind of economic environment, and a lot of companies are, you know, devoting attention cycles to making their adjustments to focus on that. That just has had an effect overall of, you know, some deals could take another month or two to get that device win. It could take another month or two for a partner to get from a device win to a product and market, or sometimes they have their product ready to go and they might, for a number of reasons, decide to launch it a few months later. So all of that was the dynamic we talked about, that we were seeing the cumulative effect of last quarter when we guided to high single-digit growth in Dolby Atmos, Dolby Vision, and imaging patents. We are still growing. We still see growth of high single digits. We continue to have really strong engagement across the ecosystem. We continue to see high single-digit growth for the year, and we continue to be confident that with the engagement we have and the wins that we're getting, that we can return to the 15%-25% CAGR over that midterm, 3-5-year period. Great. And then maybe just kind of circling back a little bit to CES, you had some, some comments in the, prepared remarks. So maybe just give an assessment of, you know, how CES went this year, perhaps versus last year, and any momentum you're seeing, at least perhaps with, like, initial conversations coming out of this year. Thanks. Yeah. So, you know, I think, you know, one highlight for us was just that as you, you know, walk the show floor, Dolby is everywhere across the show floor, and we were featured in a number of our partners', lineup announcements. We were featured across the living room, across, you know, all living room devices. So, that was a real highlight, sort of outside the Dolby space, around everywhere. Within the Dolby space, of course, we were showing, you know, everything we do, but I would say automotive is where we just had, you know, a lot of engagement, a lot of activity. We had a lot to share. We had a demo car, which, you know, really shows the full power of a Dolby Atmos experience for a car at an affordable price point, with four channels and eight speakers. A lot of interest in that. We had and a number of cars. There's nothing like actually experiencing Dolby Atmos to get excited about Dolby Atmos in the car. And we have a really robust pipeline, really strong engagement. You know, most every major auto manufacturer is represented at the show, and we had a lot of people, a lot of people coming through. So those were some of the highlights for us, Ralph. Great. Maybe one last one, and I'll turn it over. And, you know, historically, Dolby has been sort of a professional consumer strategy, and a lot of times your newer products start in pretty high-end devices and make their way into, you know, more mass market prices. Anything you're observing in the auto market, you know, that would sort of, you know, suggest that that would alter, you know, are things maybe perhaps picking up, where you might see Atmos move to, you know, less expensive vehicles? Just love your, your thoughts on that. ... Yeah, it's a great question, 'cause as you know, that is, you know, our goal is to have Dolby Atmos be the way everybody experiences music in the car. And, you know, it's early days. We're at 13 OEM wins. That's up from 10 last quarter. We've only been at it a couple of years. Just over half of those are shipping in the market. Many of them will be coming to market this year. We've already seen partners like Mercedes extend to - they're already up to 10 models. And we're expecting to release more this year. This quarter, I mentioned Zeekr by Geely in China. That model that they announced is gonna be at a price point of just under $30,000. I do believe that there's something about the Dolby Atmos experience, the importance of music in the car, which, you know, combined with the engagements we're having, that we believe we have the opportunity to get to the mainstream, even as we start out at the high end here. So that's our focus. And being able to demonstrate the experience in an affordable car is a big part of the equation. 'Cause, you know, many of those first models, if you're at the highest end, luxury models, you could be talking 20, even 30 speakers. To be able to have people experience it at the type of hardware implementation and cost that your mainstream models are gonna have, that's a big step forward for our team to do that, and it got a really strong reception. Great. Thank you, Kevin. Your next question comes from the line of Steven Frankel with Rosenblatt. Your line is open. Good afternoon. Let me start with a couple of Robert questions to get him off the sideline, and then we'll go to you, Kevin. So, Robert, on, on mobile, which obviously was down, sharply down, a lot more than the market, maybe give us some insight into the timing differences behind that, and does the timing difference there explain most of the cash flow difference on a year-over-year basis? Yeah. Hi, Steve. I'll answer those two separately. So if you think about mobile, if you take a step back, it's about where we expect it to be for the full year. We expect it to be down slightly, really due to market trends, you know, and that's gonna be partially offset by growth in Dolby Atmos and Dolby Vision and Imaging there. It's down for the quarter due to the timing, as you said, of minimum volume commitments and recoveries, and that can swing from quarter to quarter. We do expect it to be up significantly sequentially next quarter, so you will see timing differences on both ends of that. As it gets to the cash flow, in terms of just setting the stage for cash flow. Yeah, Q1 is a normally weak quarter, you know, due to seasonality, and you can see that. This quarter was a, you know, atypically soft. You know, there were working capital balance timing issues that went against us this particular quarter. But if you step back and take a look at cash flow over time, operating cash flows will fluctuate quarter to quarter, but it correlates very closely to our non-GAAP net income over time, and you will continue to see that. Okay. And then, Kevin, thanks for the update on IO. Can you give us any more color? And just to clarify, you said multiple seven-figure deals, and what could you tell us about those customers or use cases? Yeah. So, yeah, thanks, Steve. So you remember that, last quarter, we talked about how we were focusing on where we were seeing increased demand, and that where we were seeing that demand is with larger customers that were wanting to implement at larger scale. And in particular, the use cases that we're excited about with our customers and our prospects are all in and around the sports and entertainment space, and companies that are looking to really innovate around the digital experience. And they want to offer experiences in real time. They want to offer experiences that more are more interactive and more personalized. Many of them are starting with our ability to offer streaming and ultra-low latency, which means hundreds of milliseconds of delay, compared to the 7 or 8 seconds on average you might otherwise get. That continues to be the use cases that we're excited about. We're seeing a lot of interest in areas like iGaming and sports betting, where there are some very clear value propositions for the value of having that content be in real time. And beyond that, we're just seeing, again, across the broader sports and entertainment experience, a lot of creative ideas around where to take this because people are, of course, expecting to engage in real time and have a more personal relationship with their content. So that's what we're seeing. Yeah, we did sign a couple of seven-figure deals, and that's, I think, just a data point that you know this, the shift that we've made from kind of the self-service developer platform to focus on these larger opportunities. We feel like we're on the right path, and we're really excited about the prospects going forward. Still early days, but good progress. Okay. And to pick up on Ralph's question about getting to more mass market platforms, with Atmos Auto, encouraged by the fact that you're seeing that in China, you know, closer to home or in Europe, do you think those companies are waiting for more consumer demand, or do you think there are other factors that are holding back today, but they don't-- this doesn't have to be pulled through by the consumer for them to be convinced there's value in doing this? ... I think it's just that we've been in the market for selling Dolby Atmos for about 2 years. We've added 13 OEMs. It's natural that those OEMs are gonna start with the higher-end models, and we think that's, you know, substantial progress for 2 years. We think that each of those partners are interested in continuing to expand their lineups, and are expanding their lineups. So, and when we look across our pipeline, we see a lot of interest for both, and that includes interest in mainstream models, which is why we wanted to, you know, demonstrate to our partners that the experience for an affordable price point with an appropriate amount of hardware, audio hardware, is a really spectacular experience. Great. That's all the questions I have for now. Thank you. Thank you. Your next question comes from the line of Jim Goss with Barrington Research. Your line is open. Thanks. I'd just like to talk a little more about the music and cars idea. Also, did I understand correctly that you had some OTA updates to enable usage on some devices with new technologies? And if so, how much of that is possible? How prevalent is it, and how do you benefit economically? Yeah, so what you picked up on, Jim, is that the Zeekr announcement, they have told their customers that their they'll get their Dolby Atmos update by an over-the-air update. So yeah, clearly, that they have the that requires you to have the, you know, the right hardware requirements and everything to be able to do that. But the economic model is no different for us. We're still we still charge per device, in this case, per car, so that's no different. But what's exciting about it is that, you know, it means that it provides a way to enable more cars, you know, to the extent that there are cars on the road that have the base capabilities to receive it, that it sort of, in that respect, expands the addressable market. So it primarily involves electric vehicles or and not too many of the other types, even if they're high-tech type cars? Well, in this case, it's an electric vehicle. I mean, there are many vehicles that can receive over-the-air updates for the entertainment system, in our case, or other aspects of it. Increasingly, that's becoming the case. But I mean, the big news here is that we have another OEM win, and that they're gonna be introducing it into a car that has a price point under $30,000. And I think... And you're right, it is significant that our partners are increasingly, across many of our device categories, if they have the base hardware requirements, it is, in some cases, possible to bring Dolby Atmos and Dolby Vision to consumers via an over-the-air update. Okay, maybe one other one. You've been very good at pursuing increased penetration for Atmos and Vision in rolling out additional SKUs in various devices. At what point does it shift in your—do they shift in your mind to foundational technologies, rather than the growth technologies? How do you look at that sort of thing as you roll through the cycles? Yeah, look, the spirit of the foundational, compared to Atmos, Vision, and imaging patents, was to help you and the investment community understand how to think about the macro environment. So for our foundational offerings, which are both our audio patents and our branded audio codecs, those enjoy such significant penetration against such a broad range of devices that what happens in the macro in terms of consumer spending, or more specifically, how many devices are shipped during a quarter, is gonna be a big factor on what happens with foundational revenues. Whereas, you know, we've been talking a lot today about Dolby Atmos and Dolby Vision, even in, you know, TVs in the living room, where we have our highest penetration of Dolby Atmos and Dolby Vision, we still have a lot of devices to pursue. And then, you know, automotive, as we just talked about, it's still pretty early days. And for mobile, we have pretty good penetration of Dolby Atmos, and a significant opportunity to continue to extend our presence based on our early wins in Dolby Vision and Dolby Vision capture. And so, obviously, across the board, the macroeconomic, how many devices are being purchased, affects us, but for Atmos and Vision, it really is more about getting on more of the devices that are shipping. And we've said that, you know, we think we can grow that significantly in the midterm. We're we believe we can get to a 15%-25% CAGR over the midterm. And so, still plenty of room to grow. So I'm not thinking about yet when it's gonna to shift to foundational. Okay, thanks very much. Appreciate it. There are no further questions at this time. I will turn the call to Peter for closing remarks. Okay, great. Everyone, thanks for dialing in on our call today, and we'll talk to you next quarter. Operator, thank you. Thank you. This concludes today's conference call. We thank you for joining. You may now disconnect your lines.