Our internet analyst at William Blair. Thanks for attending our annual Growth Stock Conference. I have to tell you from compliance, check our website for disclosures. We're really excited to have Kevin back, as he usually attends our conference every year. I think what's different this year is we've been doing a lot of meetings and NDRs with Dolby, and it's probably the most exciting kind of growth story I've seen in a while. Maybe take you back to the Consumer Electronics Show. It's the first year, I'd say, in many years where they had a very expansive sort of corridor, the Europeans would say, tons of products, and tons of devices. I think what you'll hear today is Kevin talk about how they've made these investments, particularly in music. You'll hear him talk about auto, and the growth is starting to come back, as they've been talking about for a while. I'll keep that brief. We're going to do a Q&A session, and I asked Kevin if he could maybe spend a few extra minutes on the overview of Dolby, because I know there's varying levels of knowledge, kind of the evolution and kind of where we are today, and then from there, we'll start to talk about growth. Sounds like a good jumping -off point? Sounds great. Great. Yeah. Thanks, Ralph. Yeah, I'll talk a little about who Dolby is. Hopefully, you've experienced Dolby in your lives because, for over 60 years, Dolby has been a part of the movies, the music, the stories, and the moments that stick with people for a very long time, from "Star Wars" to "Avatar," from the Grateful Dead to Taylor Swift. We were in the Walkman to your home theater, and now your car and your virtual reality headset. Whether you were getting content over a cassette tape or a DVD disc or now your favorite streaming platform, it's in Dolby. We're continuing to invent and reinvent what it means to have a quality entertainment experience. In fact, I get, to this day, a lot of people who will come up to me and share their first experience with Dolby. When I started at Dolby 20 years ago, that was often the button on the cassette tape player or the first time they experienced surround sound in the movies. Increasingly, what I hear about is the first time somebody was wowed by Dolby Atmos in the car. How excited they are that they can capture Dolby Vision content on their phone and share that content in Dolby Vision over Instagram. I was recently speaking to a group of college students, and the number one answer on the board was music over their phone and their headphones and how impactful Dolby Atmos music is. We're everywhere. We're movies, TV, gaming, sports, and social media content, whether it's on your phone, your television, your gaming console, your PC, your virtual reality headset, or increasingly your car. Dolby is there. The way Dolby builds these ecosystems is that we do partner broadly across these ecosystems. We work with the content creators. We work with the content owners and distributors. We work with the device manufacturers. We work with their supply chains, chipset companies, and software companies to make all of this possible. For content creators, that means we're working with them to provide the technology, the know-how, and plugin tools into their workflow to allow them to create in Dolby. We're enhancing their audio/video palette, which is what they use to tell stories. The net result of that is that all 30 of the top -grossing box office movies domestically last year were in Dolby Atmos and Dolby Vision. About 95% of the top 100 Billboard musicians are mixing music in Dolby Atmos. As I said earlier, you can now; if you have an iPhone, you can capture content in Dolby Vision, and you can share that content over Instagram. We're all creators today. As it relates to the content platforms, this ranges from traditional broadcast to all of your major streaming providers: Apple, Netflix, Disney, Amazon, and Tencent in China. It's global. Increasingly social media platforms, including Meta and Douyin in China, and we're providing them with the technologies and tools to be able to take what this artist created in Dolby and to be able to distribute it efficiently in this Dolby experience to get it to the devices, which is where we partner with device manufacturers to be able to offer these differentiated Dolby experiences, whether it's in your home or in your car or something that you're wearing. This ranges from Apple to Xiaomi, from Samsung and LG to Hisense and TCL, from Mercedes and Cadillac to BYD and NIO. It really is a cast of thousands, this very broad network of Dolby-enabled partners and customers that make these experiences possible. Where we generate the majority of our revenue is from those devices at the point of playback, the device manufacturers. We're enabling these ecosystems to set up that business model where we're charging a royalty each time that a device or a car or something is selling with Dolby in it. That's the majority of our revenue. It's a high -margin, 98% gross margin, consistently profitable business with a lot of leverage. It's very defensible. That network ecosystem that we've built over decades that I just talked about. We've got a portfolio of intellectual property that's been built up over decades, and then we have this position in the market where Dolby is embedded in billions and billions of devices. It's a very difficult model to replicate. As Ralph talked about, we're really excited about some of the growth drivers that we have right here, right now that are coming together that we've been investing in for a number of years. Auto, in car entertainment experience, we have a lot of momentum and a lot of room for growth. We still have a lot of room to grow in the living room with the television experience. I've mentioned social media a couple of times. Obviously, the primary use case is on mobile devices and many other devices, and probably future use cases like wearables are places where we're getting a lot of new adoption. Beyond that, we're also now bringing new value to the content platforms where we're providing value to those content platforms as a paying customer. That opens up a whole new market opportunity for Dolby. What's really driving that is that increasingly these content platforms are differentiating on experience. Whereas not too long ago, the primary vector for differentiation was access to content: which content you have and how much content you can create. It's about the experience. Well, that's Dolby's wheelhouse. That's what we do. That's what we've woken up thinking about for over 60 years: how we make that experience more immersive, how we enable artists and creatives to create those experiences, and how we make the experience more emotive and more visceral. That's where we're seeing opportunities to provide new products and new offerings to content platforms, and that significantly opens up Dolby's opportunity as we go forward. Great. A few years ago, you broke out the business into foundational and new products. Can you sort of frame that for investors, provide the split, and maybe mechanically help them think about how the business is growing again? Yeah, thank you. This was, I think, just after the onset of the pandemic that we provided this breakout. It was in response to everybody wanting to understand; everybody could see that it was affecting the macro environment, and how would that affect Dolby? We broke it out between our foundational audio technologies, which are the core audio tech codecs, which are essential to the way most entertainment audio content is delivered. That was characterized by pretty high attach rates across a very broad range of devices. Which is to say that the effect of the macro is that there is an effect on that part of the business because it has such broad adoption that if you ask kind of what's affecting that part of the business, the macro trends are going to be one of the top factors. On the other hand, we had and have Dolby Atmos and Dolby Vision; our imaging patents would still have significant room for increased adoption. That part of the portfolio, of course, nothing's immune to the macro, but it's been able to grow through thick and thin. It's grown about 20% a year over the last five years through all of these changes in macro, whether we're talking about the pandemic or supply chain disruptions or trade policy or geopolitical developments. Whereas foundational was off during the first year of the pandemic, 2020. I don't know if you all remember in 2021, maybe you all contributed to this, unexpectedly to us, everybody went out and bought TVs and PCs. 2021 was a great year for foundations. The next three years after that, we suffered from the hangover of all those pandemic purchases, especially around PCs and also TVs. We were seeing, coming off those highs, our foundational revenues were down. At the beginning of that period, mind you, foundational was making up like 80% of our business because these newer technologies were just kind of coming to the market. Scroll forward to today, the last couple of years, not that the macro environment still doesn't have a lot going on, but we've stabilized the last couple of years because it really was that hangover that was really affecting us. We're through that. Importantly, as I said, Dolby Atmos, Dolby Vision, and the imaging patents have been growing 20% a year. Whereas that was 20% of the revenue at the beginning of this period of time we're talking about, now it's approaching 50%. Now you have that growth part of the business really contributing more significantly to the top line growth rate. That's how we've been able to get back, Ralph, to organic growth, and it's why we're excited going forward, because that continues to grow as a part of the business, and we continue to be really excited about the growth drivers with that part of the business. Great. Then maybe kind of double-click on the growth drivers. Can you walk us through the auto success you've had initially, sort of in China, and how that's expanded to other— parts of the world? Walk through mobile, if you could. Then as well as televisions. Then maybe when you're discussing mobile, sort of walk us through Meta and Xiaomi. Am I saying that right? Yeah, you got it. That's sweet. Xiaomi as well. Xiaomi, Douyin. Don't feel bad; I always make Peter do an enunciation for me if I'm reading that, but I'm getting better at it. If you could walk through those drivers. Yeah to bring a finer point to how you're growing. Absolutely. Automotive is really exciting. The breakthrough for us in automotive was applying Dolby Atmos to music. For us, that starts with working with the creatives. It starts with working with the labels. It started at Capitol Records in Abbey Road, working with musicians to help them create in Dolby Atmos. What we found was that they were just in awe of this experience. Many of them were brought to tears the first time they heard their first song in Dolby Atmos. Not even their song, just their favorite song from some other artist. They consistently describe it as just a completely different way to experience their music. It puts you in the music. When we get that kind of reaction, we know we're really onto something. What they cared about was that they cared a lot about the car. They also cared about mobile and the home, but the car is just a classic way that we all experience music. That's what set the stage around Again, it's around the same time—the beginning of the pandemic is when we were starting to do this. Turns out, by the way, that was a pretty good new product to be bringing to market during the pandemic, because our engineers had souped -up cars in their driveways, didn't have any commercial partners yet, to be Dolby Atmos capable. The beauty of it is we could drive it to the homes of—I'm using the royal we—our team could drive these cars to music executives, musicians, and car executives and demo them outside their homes. People would welcome them with open arms because we were all starved for attention. That was the backdrop. Now, scroll forward over the first three or four years of Dolby Atmos being available to cars. We now have 35 auto manufacturers; to your point, they really did take off first in China, where they just moved very quickly and aggressively. The product cycles are fast, and the in-car entertainment experience is very advanced. There's also a lot of research that says that in China in particular, people spend a lot of time in their car while they're not driving their car. In effect, it could be the best home theater experience you have is in your car. By the way, that's increasingly true; we find here in the U.S. as well. It could be simply you're waiting to pick up kids for practice. It could be that you're taking a few minutes as you wind down from work. People do spend time in their car, and the in-car entertainment experience, therefore, is a big focus, and Dolby Atmos is a really compelling offering as it relates to up-leveling that experience. 35 OEMs. We've now expanded well beyond China throughout the entire Cadillac EV lineup. Mercedes-Benz is one of our first customers outside of China. They've adopted across a very broad range of their models. Most recently, BMW announced that they're launching, and Hyundai announced that they're launching with more of an affordable implementation footprint. That was really good. China is also spreading to the rest of the world. At the Paris Auto Show, BYD launched its Denza lineup, which is its premium auto model for Europe, all with Dolby Atmos as a standard. We're also seeing early traction with Dolby Vision. We've got a handful of our first Dolby Vision customers in China. Ultimately, we think this goes beyond the music experience in the car to the entirety of the audiovisual experience in the car. One could argue transportation. As we spend less time having to actually be focused on driving the car, that really, we think, opens up the possibilities for that audiovisual experience. That was automotive. Auto. In TV, one of the things we're really excited about is a new product offering, Dolby Vision 2. Dolby Vision came to market around 2016, 2017. As of last year, it was on about 30% of TVs, as was Dolby Atmos. You're getting Dolby Vision and Dolby Atmos experience on about 30% of TVs. Very high penetration at the high end of the television market. We have partners like Hisense and TCL that have gone pretty deep into the middle. Their opportunity is to get broader adoption in that mid- to low -end. Dolby Vision 2 is a significant evolution beyond Dolby Vision in terms of the quality experience. We were demonstrating this at CES. There are a number of technical features and a number of things it improves, but I think one of the things that really stands out is for the mid-range in particular: we had two $300 TVs, one 4K Dolby Vision and the other 4K Dolby Vision 2, and it's just so stunningly better. Dolby Vision and Dolby Vision 2 are all about contrast. You get darker dark, darker blacks, brighter highlights, and a broader range of color. Dolby Vision 2, we think, is what will really re-accelerate increasing the adoption among television manufacturers because it really scratches the itch they have to come up with compelling reasons for people to go and upgrade their televisions, especially at that mid to low-end tier. Mobile. Social media is an area that, again, started in China. We have very broad support across platforms like Bilibili and Tencent. I mentioned Douyin. Xiaohongshu is another notable provider. Started there, what that did was create the value proposition for wanting to be able to play back and capture content on your phone, opening up the market for Dolby Vision on phones. We have most of the major mobile providers there, Xiaomi, OPPO, and Honor, starting at the high end as it usually does, with still a lot of room to grow and expand deeper into those lineups. Apple, I should note, was the first to adopt Dolby Vision capture. All iPhones, the entire iPhone lineup, support Dolby Atmos, Dolby Vision playback, and Dolby Vision capture. What's new this year is that during the first quarter, Instagram began supporting Dolby Vision. They quickly followed that up with adoption on Facebook. This is just supporting our ability to go sell this value proposition to mobile phone providers to get Dolby Vision supported on more phones. I think it also will create opportunities across wearables generally as we look forward. Then we also have on the licensing front, as it relates to the imaging patent portfolio, and this kind of begins to cross over into what I said about how we're providing value to the content platforms in addition to device manufacturers is our patent licensing business mostly operates through patent pools, where we are one of many licensors who come together to offer device manufacturers freedom to operate around, in this case, video codecs. Historically, those pools have been licensing device manufacturers. Now they are licensing the content platforms as well. That started about—again, coming into this year, there are about 40 licensors. They're up to about half a dozen licensees, paying customers, that is, globally. They have ByteDance in China. They've got Roku here in the U.S. This represents a significant expansion of the potential for that imaging licensing program, and we're really excited about the potential for that as well. Yeah, maybe if you kind of frame that with a little bit more detail. I think on the calls you talked about that being potentially a new incremental 10% of revenue within three years. I think you kind of went through the patent side, but maybe also if you could frame the streaming side as well with some of the new products and on OptiView. As I said, most of our revenue, most all of our revenue today, comes from device licensing and a smaller amount of sales into the cinema. We do think that in three years, 10% of our revenue can be coming from content platforms. We're doing everything we can to accelerate that and increase that opportunity. Part of that is what I just said, the imaging patent programs being now expanded to include those content platforms. The other is our new initiative around Dolby OptiView. Really, the genesis of Dolby OptiView was a self-service developer platform that we stood up several years ago, putting up some capabilities that we thought would be valued by developers. The demand signal that we saw coming out of that was particularly around sports and sports betting: the ability to stream high-quality audio/video content in ultra-low latency and to be able to do it in a synchronized way. It is important if you are trying to do more real-time interactive offerings to increase audience engagement, because if I see the touchdown 10 seconds before you see the touchdown, it is kind of not a very fun social experience, right? We can do it sub-second, and we can do it in a synchronized way. A couple of years ago, we refocused from the broad-based self-service program to, okay, we believe there is a real opportunity to lead the way in sports and sports betting, serving customers, which could be streamers, but it could also be the leagues, the teams, the apps, and the services that are promoting those sports. Customers include NFL and NASCAR. More recently it includes Sports Information and Genius Sports, which are technology providers to the sports betting industry. We have a player. We have this ability to stream in very low latency. We now have an ad insertion technology, which allows you to insert personalized ads at that pace and to be able to adapt in real time to the screen size. The way we see the opportunity, the way we've always seen the opportunity, is here's how the world is changing, or the world wants to change. For as long as I've been watching sports, we all see the same experiences. We tune into NBC, and we see the same experience. The promise of streaming has always been that we can personalize that experience to what most engages you. While more and more sports is going the way of streaming, we're just watching the same thing on a streaming platform. The promise: we've been previewing this quarter starting at NAB, our sports intelligence platform, which takes us further, which is to be able to customize which highlights you're seeing in between plays versus what I'm seeing in between plays. Inserting content that might be of interest to you as it relates to sees, this moment in the game is a lot like this moment from 1982 when these teams faced each other. It could also be that maybe Peter's more interested in the technical aspects of the sport. I'm more interested in the energy and the emotion around the sport that would inform the experience we're getting. The opportunities are really endless because, really, what we ought to have is the ability to understand whether you're engaged and, if you're not engaged, what might engage you. You think about the potential, for instance, with fantasy sports like that; it was obviously an opportunity where each of us might have very different things that we want to focus on, even different camera shots within the same game. Early days, but this is getting really strong resonance from our customers. Like I said, we've got a good group of customers, like the NFL, like NASCAR, and Genius Sports Information Systems, who are still scaling the ultra-low latency streaming and synchronized delivery, and they're also interested; everybody's interested in getting to this world where we're truly personalizing these experiences and increasing fan engagement. Between Dolby OptiView and imaging patents, that's what I'm talking about when I say in three years we could have 10% of our revenue coming from content platforms. Content platforms could be ByteDance and Roku; it could be NFL and NASCAR in this context. Obviously, that's a considerable expansion of our opportunity. Early days, we're really excited about where we're going with this. AI is accelerating it. It's enabling it. It's an important part of how we're building it. That's what's exciting us. We got a few minutes left. I'll pause and see if there are any questions out here. All right. Maybe just the balance sheet. It's always been a sort of a pushback by investors that Dolby carries a lot of cash, maybe too much. More recently, at least from my observation, you've been using the balance sheet more and bought the GE patents. I think you've bought back more stock year to date than you have all of last year. Maybe philosophically, has something changed there in terms of cash deployment? Yes, last year we did have a great opportunity to build on our imaging patent portfolio from a very accretive acquisition, which was a use of capital. We've always, of course, bought back stock to offset stock comp dilution. We have a recurring dividend that we've increased every year, but one during the pandemic. From time to time, we've bought back stock over and above what it takes to offset dilution. Since 2020, we've returned about $2 billion. To your point, yes, this year to date, we've bought back more stock than we had all of last year. That's something that we continue to look at each quarter and with the board and look at where the opportunities are to deploy cash and decide the balance of returning to shareholders. No questions. All right. No conversation would be complete without AI. Can you maybe talk about the tools you're developing today for the content creators and how you see AI sort of evolving both internally at Dolby and sort of the products you could offer to the end market? Well, I would start by saying the foundation is everything that we've talked about, which is that Dolby has decades of research into how humans perceive sight and sound in the context of entertainment and how this networked ecosystem of thousands of customers and partners comes together to make that happen. AI creates the opportunity for us to create products and to train models that accelerate what we've always aimed to do, which is reinvent the entertainment experience. I'll give you two short examples given the time we have. One, we just talked about Dolby OptiView. This whole notion of being able to personalize the experience is something that has been talked about for many years. We were demonstrating early versions of it 10 years ago at CES; the technology just wasn't there to really make it happen. AI is what's making it possible. We are very much developing all of our products, and technologies are being developed with the help of AI. Importantly, it's integrating that with data and AI models that allows us to do that kind of work. Ralph, also in just our core business, Dolby technologies, our licensing technologies are essential to the way entertainment content is delivered today. As our partners look to further avail themselves of the use of AI, we find that they are also looking to make sure that their infrastructure, their systems, which Dolby is a part of, is robust. AI is giving us the ability to introduce new features into that. One example is dialogue enhancement. This is the problem with the increasing the professionalism of TV content, where you've got huge explosions and then slight whispers, and you struggle to find a comfortable listening volume, or everybody's just using subtitles. Actually extracting the dialogue from that is a very difficult task, and we've built our own model based on data we've had, subjective data, and a lot of other data to make that a part of the Dolby foundational offering. That's getting really good feedback. Another model we've built is around mixing audio. We can now capture audio on the phone, but not everybody can be a professional audio mixer, and obviously, if all you do is capture it, it actually doesn't sound very good. You've probably experienced this. We've built AI models that we think are going to be able to help people to get close to what a professional audio mixer would do with that. These are ways that we are building AI models and applying that to both our existing technologies and creating new opportunities in the future. Great. Unfortunately, we are out of time. I thank everybody for their interest in Dolby. Kevin, thank you for your time. The breakout will be in Jenny B, which is on the second floor. Great. Thank you very much. Thanks, Ralph. Thanks. Thanks, everybody, for joining us this morning.