Film and TV audio giant Dolby beat its guidance as it announced revenue of $274.3 million for its second fiscal quarter ending 1 April.
dolbyThat’s up just 1% versus the year earlier period, but represents an increase of 14% versus the preceding quarter. Profit for the quarter meanwhile was $67.4 million — this represents a 16% increase over the net income for Q2 2015 of $57.9 million.
Dolby management’s guidance at the end of first quarter had been for revenue in the range of $255 million to $270 million for the second quarter, with gross margins between 89% and 90%, and GAAP earnings per share of $0.42 and $0.48. On each measure, Dolby outperformed guidance, and Dolby’s shares were trading approximately 13% higher after the earnings release.
“It was a solid quarter and we gained momentum in mobile with the inclusion of Dolby Audio in iOS,” said Kevin Yeaman, president and CEO, Dolby Laboratories. “We’ve also expanded the number of Dolby Vision TVs in market and the amount of Dolby Vision content, while continuing to roll out Dolby Cinema locations around the world.”
Licensing revenue in the broadcast vertical (primarily televisions and set-top boxes) accounted for 45% of total licensing revenue or $112.2 million. On an aggregate basis, broadcast licensing grew 9.8% versus Q2 2015 and 10.7% versus the preceding quarter, Q1 2016. As a percentage of total licensing revenue, broadcast contributed 42% in Q2 2015 and 48% during the first quarter of 2016.
That was mainly due to higher back payments and higher volume in set-top boxes. During its earnings call, management noted Dolby is well-positioned to benefit from further growth in the broadcast market as emerging markets transition to digital broadcast.
Management guidance for the third fiscal quarter is revenue in the range of $260 million to $275 million, gross margins between 89% and 90%, and earnings per share between $0.47 and $0.53.
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