Dolby Laboratories, Inc. (DLB)’s First Quarter 2015 Earnings Conference Call Transcript

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Through Dolby Cinema, exhibitors are able to offer a unique premium experience. Moviegoers experience the cinema the best way they can and Dolby is engaged with the content community to further develop the pipeline of content in Dolby Vision and Dolby Atmos. In December, JT Bioscoop in the Netherlands opened the first Dolby Cinema with very positive reviews. We’ll keep you posted on future Dolby Cinema sites.

Beyond bringing Dolby Vision to the big screen, we continue to make progress on bringing Dolby Vision to the home. Dolby Vision is our end-to-end imaging solution, which gives creative teams the freedom to use the full gamut of colors, brightness and contrast resulting in an enhanced entertainment experience. We kicked-off the high dynamic range conversation last year at CES with the announcement of Dolby Vision. This year at CES, HDR demonstrations were seen everywhere as it appears that the market is now ready for Dolby Vision. What we are offering with Dolby Vision is a scalable, commercially available end-to-end solution from content creation through delivery and playback.

Another sign that the market is ready for HDR is the movement from the industry to create the UHD Alliance. Dolby is one of the founding members of the UHD Alliance and we’ll contribute to establishing standard to support innovation in video technologies, which will include HDR for broad adoption. Warner Brothers has recently announced that they will be mastering titles in Dolby Vision. The first slate of titles will include recent blockbusters like Edge of Tomorrow, Into the Storm and the Lego Movie. At CES, Netflix announced plans to stream content in Dolby Vision in 2015. We are well on our way to creating a strong pipeline of Dolby Vision content for the cinema and the home. We continue to expect the first TV using Dolby Vision to ship in the first half of calendar 2015. Lastly, let me touch on Dolby Voice. This quarter we began shipping the Dolby Conference Phone which further extends the quality experience we can provide with our offering.

So let me wrap up with a few reflections as we enter the new calendar year. As you know, we’ve gone through a cycle of R&D investment in order to fuel innovation and open up new areas for growth. At the same time, we significantly expanded our presence in online, mobile and digital broadcast, offsetting secular declines in PC and optical disc and developing new ecosystems in which to deploy our new solutions. These efforts have resulted in platforms for breakthrough audio, imaging and voice experiences, which have yielded offerings we’ve discussed today: Dolby Atmos, Dolby Cinema, Dolby Voice and Dolby Vision. In the year ahead, I expect our efforts to result in commercial wins further giving you data points on our progress towards establishing a strong foundation for long term revenue growth. I look forward to keeping you updated throughout the year. Operator, we’re ready for questions.

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