So that’s our focus. And being able to demonstrate the experience in an affordable car is a big part of the equation because many of those first models, if you’re at the highest end luxury models, you could be talking 20, even 30 speakers. So to be able to have people experience it at the type of a hardware implementation and cost that your mainstream models are going to have. That’s a big step forward for our team to do that and they’ve got a really strong reception.
Operator: Your next question comes from the line of Steven Frankel with Rosenblatt.
Steven Frankel: 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 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?
Robert Park: Yes. Steve, I’ll answer those two separately. So if you think about mobile, if you take a step back, it’s about where we expected it to be for the full year. We expect it to be down slightly, really due to market trends. And that’s going to be partially offset by growth in Dolby Atmos and Dolby Vision and imaging there. It is 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 difference on both ends of that. As it goes to the cash flow in terms of just setting the stage for cash flow. Yes, Q1 is normally a weak quarter due to seasonality and you can see that.
This quarter was atypically soft. There were working capital balance timing issues that went against us this particular quarter. But if you step back and take a look at our 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.
Steven Frankel: Okay. And then, Kevin, thanks for the update on IO. Can you give us any more color and just to clarify, you said multiple 7-figure deals? And what could you tell us about those customers or use cases?
Kevin Yeaman: Yes. So — yes. 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’re 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 are more interactive and more personalized. And many of them are starting with our ability to offer streaming in 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 — those are the use cases that we’re excited about. We’re seeing a lot of interest in areas like iGaming and sports betting, where there’s 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. And yes, we did sign a couple of 7-figure deals and that’s, I think, just a data point that 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.
Steven Frankel: Okay. And then 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, 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 that 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?
Kevin Yeaman: 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 going to start with the higher-end models. And we think that’s a 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 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.
Operator: Your next question comes from the line of Jim Goss with Barrington Research.
