QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated Filer | ☐ | |||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
Emerging Growth Company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 6. | ||||||||
Abbreviation | Term | |||||||
AAC | Advanced Audio Coding | |||||||
AFS | Available-For-Sale (Securities) | |||||||
AOCI | Accumulated Other Comprehensive Income (Loss) | |||||||
API | Application Programming Interface | |||||||
APIC | Additional Paid In-Capital | |||||||
ASC | Accounting Standards Codification | |||||||
ASP | Average Selling Price | |||||||
ASU | Accounting Standards Update | |||||||
ATSC | Advanced Television Systems Committee | |||||||
AVC | Advanced Video Coding | |||||||
AVR | Audio/Video Receiver | |||||||
CE | Consumer Electronics | |||||||
CODM | Chief Operating Decision Maker | |||||||
COGS | Cost Of Goods Sold | |||||||
COSO | Committee Of Sponsoring Organizations (Of The Treadway Commission) | |||||||
DD | Dolby Digital® | |||||||
DD+ | Dolby Digital Plus™ | |||||||
DMA | Digital Media Adapter | |||||||
DTV | Digital Television | |||||||
DVB | Digital Video Broadcasting | |||||||
DVD | Digital Versatile Disc | |||||||
EPS | Earnings Per Share | |||||||
ESP | Estimated Selling Price | |||||||
ESPP | Employee Stock Purchase Plan | |||||||
FASB | Financial Accounting Standards Board | |||||||
FCPA | Foreign Corrupt Practices Act | |||||||
G&A | General and Administrative | |||||||
HD | High Definition | |||||||
HDR | High-Dynamic Range | |||||||
HDTV | High Definition Television | |||||||
HE-AAC | High Efficiency Advanced Audio Coding | |||||||
HEVC | High Efficiency Video Coding | |||||||
HTIB | Home Theater In-A-Box | |||||||
IC | Integrated Circuit | |||||||
IMB | Integrated Media Block | |||||||
IP | Intellectual Property | |||||||
LP | Limited Partner/Partnership | |||||||
NOL | Net Operating Loss | |||||||
OECD | Organization For Economic Co-Operation & Development | |||||||
OEM | Original Equipment Manufacturer | |||||||
OTT | Over-The-Top | |||||||
PC | Personal Computer | |||||||
PCS | Post-Contract Support | |||||||
PP&E | Property, Plant, and Equipment | |||||||
PSO | Performance-Based Stock Option | |||||||
PSU | Performance-Based Restricted Stock Unit | |||||||
R&D | Research and Development | |||||||
ROU | Right-Of-Use | |||||||
RSU | Restricted Stock Unit | |||||||
S&M | Sales and Marketing | |||||||
SEC | U.S. Securities and Exchange Commission | |||||||
SERP | Supplemental Executive Retirement Plan | |||||||
STB | Set-Top Box | |||||||
TSR | Total Stockholder Return | |||||||
UHD | Ultra-High Definition | |||||||
U.S. GAAP | Generally Accepted Accounting Principles In The United States | |||||||
December 31, 2021 | September 24, 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Short-term investments | ||||||||
Accounts receivable, net of allowance for credit losses of $ | ||||||||
Contract assets, net of allowance for credit losses of $ | ||||||||
Inventories, net | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Long-term investments | ||||||||
Property, plant and equipment, net | ||||||||
Operating lease right-of-use assets | ||||||||
Intangible assets, net | ||||||||
Goodwill | ||||||||
Deferred taxes | ||||||||
Other non-current assets | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Accrued liabilities | ||||||||
Income taxes payable | ||||||||
Contract liabilities | ||||||||
Operating lease liabilities | ||||||||
Total current liabilities | ||||||||
Non-current contract liabilities | ||||||||
Non-current operating lease liabilities | ||||||||
Other non-current liabilities | ||||||||
Total liabilities | ||||||||
Stockholders’ equity: | ||||||||
Class A, $ | ||||||||
Class B, $ | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ( | ||||||
Total stockholders’ equity – Dolby Laboratories, Inc. | ||||||||
Controlling interest | ||||||||
Total stockholders’ equity | ||||||||
Total liabilities and stockholders’ equity | $ | $ |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Revenue: | ||||||||
Licensing | $ | $ | ||||||
Products and services | ||||||||
Total revenue | ||||||||
Cost of revenue: | ||||||||
Cost of licensing | ||||||||
Cost of products and services | ||||||||
Total cost of revenue | ||||||||
Gross margin | ||||||||
Operating expenses: | ||||||||
Research and development | ||||||||
Sales and marketing | ||||||||
General and administrative | ||||||||
Gain on sale of assets | ( | |||||||
Restructuring charges/(credits) | ( | |||||||
Total operating expenses | ||||||||
Operating income | ||||||||
Other income/(expense): | ||||||||
Interest income | ||||||||
Interest expense | ( | ( | ||||||
Other income, net | ||||||||
Total other income | ||||||||
Income before income taxes | ||||||||
Provision for income taxes | ( | ( | ||||||
Net income including controlling interest | ||||||||
Less: net (income)/loss attributable to controlling interest | ( | |||||||
Net income attributable to Dolby Laboratories, Inc. | $ | $ | ||||||
Net income per share: | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Weighted-average shares outstanding: | ||||||||
Basic | ||||||||
Diluted | ||||||||
Related party rent expense: | ||||||||
Included in operating expenses | $ | $ | ||||||
Included in net income attributable to controlling interest | $ | $ | ||||||
Cash dividend declared per common share | $ | $ | ||||||
Cash dividend paid per common share | $ | $ |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Net income including controlling interest | $ | $ | ||||||
Other comprehensive income: | ||||||||
Currency translation adjustments gains/(losses), net of tax expense of ($ | ( | |||||||
Unrealized losses on investments, net of tax benefit/(expense) of ($ | ( | ( | ||||||
Unrealized gains on cash flow hedges, net of tax expense of ($ | ||||||||
Total other comprehensive income/(loss), net of tax | ( | |||||||
Total comprehensive income | ||||||||
Less: comprehensive (income)/loss attributable to controlling interest | ( | |||||||
Comprehensive income attributable to Dolby Laboratories, Inc. | $ | $ |
Dolby Laboratories, Inc. | |||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity - Dolby Laboratories, Inc. | Controlling Interest | Total Stockholders' Equity | |||||||||||||||||
Balance at September 24, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||
Net income | — | — | — | ( | |||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ( | ( | ( | ||||||||||||||||
Distributions to controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||
Repurchase of common stock | ( | ( | — | ( | — | ( | |||||||||||||||||
Cash dividends declared and paid on common stock | — | — | ( | — | ( | — | ( | ||||||||||||||||
Common stock issued under employee stock plans | — | — | — | ||||||||||||||||||||
Tax withholdings on vesting of restricted stock | ( | — | ( | ( | |||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | $ | $ |
Dolby Laboratories, Inc. | |||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Total Stockholders' Equity - Dolby Laboratories, Inc. | Controlling Interest | Total Stockholders' Equity | |||||||||||||||||
Balance at September 25, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||
Net income | — | — | — | ||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | ||||||||||||||||||||
Distributions to controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||
Repurchase of common stock | ( | — | ( | — | ( | ||||||||||||||||||
Cash dividends declared and paid on common stock | — | — | ( | — | ( | — | ( | ||||||||||||||||
Common stock issued under employee stock plans | — | — | — | ||||||||||||||||||||
Tax withholdings on vesting of restricted stock | ( | ( | — | — | ( | ( | |||||||||||||||||
Balance at December 25, 2020 | $ | $ | $ | $ | ( | $ | $ | $ |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Operating activities: | ||||||||
Net income including controlling interest | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Stock-based compensation | ||||||||
Amortization of operating lease right-of-use assets | ||||||||
Amortization of premium on investments | ||||||||
Provision for/(benefit from) credit losses | ( | |||||||
Deferred income taxes | ( | ( | ||||||
Gain on sale of assets | ( | |||||||
Other non-cash items affecting net income | ( | |||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | ( | ( | ||||||
Contract assets | ( | ( | ||||||
Inventories | ( | |||||||
Operating lease right-of-use assets | ( | ( | ||||||
Prepaid expenses and other assets | ( | |||||||
Accounts payable and accrued liabilities | ( | |||||||
Income taxes, net | ||||||||
Contract liabilities | ||||||||
Operating lease liabilities | ( | ( | ||||||
Other non-current liabilities | ( | ( | ||||||
Net cash provided by operating activities | ||||||||
Investing activities: | ||||||||
Purchases of marketable securities | ( | ( | ||||||
Proceeds from sales of marketable securities | ||||||||
Proceeds from maturities of marketable securities | ||||||||
Purchases of property, plant, and equipment | ( | ( | ||||||
Proceeds from sale of assets | ||||||||
Purchases of intangible assets | ( | |||||||
Purchases of other investments | ( | |||||||
Net cash used in investing activities | ( | ( | ||||||
Financing activities: | ||||||||
Proceeds from issuance of common stock | ||||||||
Repurchase of common stock | ( | ( | ||||||
Payment of cash dividend | ( | ( | ||||||
Distribution to controlling interest | ( | ( | ||||||
Shares repurchased for tax withholdings on vesting of restricted stock | ( | ( | ||||||
Net cash used in financing activities | ( | ( | ||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | ( | |||||||
Net increase/(decrease) in cash, cash equivalents, and restricted cash | ( | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | ||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
Supplemental disclosure: | ||||||||
Cash paid for income taxes, net of refunds received | $ | $ | ||||||
Non-cash investing activities and financing activities: | ||||||||
Change in property, plant, and equipment purchased, unpaid at period-end | $ | ( | $ | ( | ||||
Fiscal Quarter Ended | |||||||||||||||||
Revenue | December 31, 2021 | December 25, 2020 | |||||||||||||||
Licensing | $ | % | $ | % | |||||||||||||
Products and services | % | % | |||||||||||||||
Total revenue | $ | % | $ | % |
Fiscal Quarter Ended | |||||||||||||||||
Market | December 31, 2021 | December 25, 2020 | |||||||||||||||
Broadcast | $ | % | $ | % | |||||||||||||
Mobile | % | % | |||||||||||||||
CE | % | % | |||||||||||||||
PC | % | % | |||||||||||||||
Other | % | % | |||||||||||||||
Total licensing revenue | $ | % | $ | % |
Fiscal Quarter Ended | |||||||||||||||||
Revenue By Geographic Location | December 31, 2021 | December 25, 2020 | |||||||||||||||
United States | $ | % | $ | % | |||||||||||||
International | % | % | |||||||||||||||
Total revenue | $ | % | $ | % |
December 31, 2021 | September 24, 2021 | Change ($) | Change (%) | |||||||||||
Accounts receivable, net | $ | $ | $ | % | ||||||||||
Contract assets, net | % | |||||||||||||
Contract liabilities - current | % | |||||||||||||
Contract liabilities - non-current | % | |||||||||||||
December 31, 2021 | September 24, 2021 | ||||||||||
Trade accounts receivable | $ | $ | |||||||||
Accounts receivable from patent administration program licensees | |||||||||||
Contract assets | |||||||||||
Accounts receivable, gross and contract assets, gross | |||||||||||
Less: allowance for credit losses on accounts receivable and contract assets | ( | ( | |||||||||
Total accounts receivable and contract assets, net | $ | $ |
Allowance for Credit Losses | Beginning Balance | Charges/(Credits) to G&A | Additions/(Deductions) | Ending Balance | ||||||||||
For fiscal year-to-date period ended: | ||||||||||||||
September 24, 2021 | $ | $ | ( | $ | ( | $ | ||||||||
December 31, 2021 | ||||||||||||||
December 31, 2021 | September 24, 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total inventories | $ | $ |
December 31, 2021 | September 24, 2021 | ||||||||||
Prepaid expenses | $ | $ | |||||||||
Other current assets | |||||||||||
Total prepaid expenses and other current assets | $ | $ |
December 31, 2021 | September 24, 2021 | ||||||||||
Amounts payable to patent administration program partners | $ | $ | |||||||||
Accrued compensation and benefits | |||||||||||
Accrued professional fees | |||||||||||
Unpaid property, plant, and equipment additions | |||||||||||
Accrued customer refunds | |||||||||||
Accrued market development funds | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued liabilities | $ | $ |
December 31, 2021 | September 24, 2021 | ||||||||||
Supplemental retirement plan obligations | $ | $ | |||||||||
Non-current tax liabilities (1) | |||||||||||
Other liabilities | |||||||||||
Total other non-current liabilities | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Cost | Unrealized | Estimated Fair Value | ||||||||||||||||||||||||
Gains | Losses | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | $ | $ | $ | |||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Commercial paper | — | |||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Municipal debt securities | — | |||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Certificate of deposit | ( | |||||||||||||||||||||||||
U.S. agency securities | ||||||||||||||||||||||||||
Government bonds | ( | |||||||||||||||||||||||||
Commercial paper | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Municipal debt securities | ( | |||||||||||||||||||||||||
Short-term investments | ( | |||||||||||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||||
U.S. agency securities | ( | |||||||||||||||||||||||||
Government bonds | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Municipal debt securities | ( | |||||||||||||||||||||||||
Other investments (1) | ||||||||||||||||||||||||||
Long-term investments | ( | |||||||||||||||||||||||||
Total cash, cash equivalents, and investments | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||
Investments held in supplemental retirement plan: | ||||||||||||||||||||||||||
Assets | $ | $ | — | $ | — | $ | $ | $ | $ | |||||||||||||||||
Included in prepaid expenses and other current assets and other non-current assets | ||||||||||||||||||||||||||
Liabilities | $ | $ | — | $ | — | $ | $ | $ | $ | |||||||||||||||||
Included in accrued liabilities and other non-current liabilities | ||||||||||||||||||||||||||
Currency derivatives as hedge instruments: | ||||||||||||||||||||||||||
Assets: Included in other current assets | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: Included in other accrued liabilities | ( | ( | ( | |||||||||||||||||||||||
September 24, 2021 | ||||||||||||||||||||||||||
Cost | Unrealized | Estimated Fair Value | ||||||||||||||||||||||||
Gains | Losses | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | $ | $ | — | $ | — | |||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | — | — | — | — | ||||||||||||||||||||||
Cash and cash equivalents | — | — | ||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Certificate of deposit | — | — | ||||||||||||||||||||||||
U.S. agency securities | — | — | ||||||||||||||||||||||||
Government bonds | — | |||||||||||||||||||||||||
Commercial paper | — | — | ||||||||||||||||||||||||
Corporate bonds | — | — | ||||||||||||||||||||||||
Municipal debt securities | ( | — | — | |||||||||||||||||||||||
Short-term investments | ( | — | ||||||||||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||||
U.S. agency securities | ( | — | ||||||||||||||||||||||||
Government bonds | ( | — | ||||||||||||||||||||||||
Corporate bonds | ( | — | — | |||||||||||||||||||||||
Municipal debt securities | ( | — | — | |||||||||||||||||||||||
Other investments (1) | — | — | ||||||||||||||||||||||||
Long-term investments | ( | — | ||||||||||||||||||||||||
Total cash, cash equivalents, and investments | $ | $ | $ | ( | $ | $ | $ | $ | — | |||||||||||||||||
Investments held in supplemental retirement plan: | ||||||||||||||||||||||||||
Assets | $ | $ | — | $ | — | $ | $ | $ | — | $ | — | |||||||||||||||
Included in prepaid expenses and other current assets and other non-current assets | ||||||||||||||||||||||||||
Liabilities | $ | $ | — | $ | — | $ | $ | $ | — | $ | — | |||||||||||||||
Included in accrued liabilities and other non-current liabilities | ||||||||||||||||||||||||||
Currency derivatives as hedge instruments: | ||||||||||||||||||||||||||
Assets: Included in other current assets | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: Included in other accrued liabilities | ( | ( | ( | |||||||||||||||||||||||
December 31, 2021 | September 24, 2021 | ||||||||||||||||
Less Than 12 Months | Less Than 12 Months | ||||||||||||||||
Investment Type | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||
Certificate of deposit | $ | $ | ( | $ | $ | ||||||||||||
U.S. agency securities | ( | ( | |||||||||||||||
Government bonds | ( | ( | |||||||||||||||
Commercial paper | ( | ||||||||||||||||
Corporate bonds | ( | ( | |||||||||||||||
Municipal debt securities | ( | ( | |||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
December 31, 2021 | September 24, 2021 | ||||||||||||||||
Range of maturity | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||
Due within 1 year | $ | $ | $ | $ | |||||||||||||
Due in 1 to 2 years | |||||||||||||||||
Due in 2 to 5 years | |||||||||||||||||
Total | $ | $ | $ | $ |
Property, Plant, and Equipment | December 31, 2021 | September 24, 2021 | |||||||||
Land | $ | $ | |||||||||
Buildings and building improvements | |||||||||||
Leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Computer equipment and software | |||||||||||
Furniture and fixtures | |||||||||||
Equipment provided under operating leases | |||||||||||
Construction-in-progress | |||||||||||
Property, plant, and equipment, gross | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property, plant, and equipment, net | $ | $ |
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Lease cost | |||||||||||
Operating lease cost | $ | $ | |||||||||
Variable lease cost | |||||||||||
Total lease cost | $ | $ |
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Other information | |||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations |
December 31, 2021 | September 24, 2021 | ||||||||||
Operating Leases | |||||||||||
Weighted-average remaining lease term | |||||||||||
Weighted-average discount rate | % | % |
December 31, 2021 | |||||
Operating Leases | |||||
Remainder of Fiscal 2022 | $ | ||||
Fiscal 2023 | |||||
Fiscal 2024 | |||||
Fiscal 2025 | |||||
Fiscal 2026 | |||||
Thereafter | |||||
Total undiscounted lease payments | |||||
Less: imputed interest | ( | ||||
Total lease liabilities | $ |
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Operating Lease Income | |||||||||||
Variable operating lease income/(loss) | $ | $ | ( | ||||||||
Fixed operating lease income |
December 31, 2021 | |||||||||||
Operating Leases | Sales-Type Leases | ||||||||||
Remainder of Fiscal 2022 | $ | $ | |||||||||
Fiscal 2023 | |||||||||||
Fiscal 2024 | |||||||||||
Fiscal 2025 | |||||||||||
Fiscal 2026 | |||||||||||
Thereafter | |||||||||||
Total undiscounted cash flows | $ | ||||||||||
Less: present value of lease payments (recognized as lease receivables) | ( | ||||||||||
Difference | $ |
Goodwill | |||||
Balance at September 24, 2021 | $ | ||||
Translation adjustments | ( | ||||
Balance at December 31, 2021 | $ |
December 31, 2021 | September 24, 2021 | ||||||||||||||||||||||
Intangible Assets | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||
Acquired patents and technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
Customer relationships | ( | ( | |||||||||||||||||||||
Other intangible assets | ( | ( | |||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Fiscal Year | Amortization Expense | ||||
Remainder of 2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
Grant Date | Aggregate Shares Granted at Target Award | Aggregate Shares Exercisable at Vest Date (1) | Percentage Vested of Target Award | Vested Date | ||||||||||
December 15, 2015 | % | December 2018 | ||||||||||||
December 15, 2016 | % | December 2019 | ||||||||||||
December 15, 2017 | % | December 2020 | ||||||||||||
December 15, 2018 | % | December 2021 |
Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life | Aggregate Intrinsic Value (1) | |||||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||||
Options outstanding at September 25, 2021 | $ | |||||||||||||
Grants | ||||||||||||||
Exercises | ( | |||||||||||||
Forfeitures and cancellations | ( | |||||||||||||
Options outstanding at December 31, 2021 | $ | |||||||||||||
Options vested and expected to vest at December 31, 2021 | ||||||||||||||
Options exercisable at December 31, 2021 | $ | $ |
Shares | Weighted-Average Grant Date Fair Value | |||||||
(in thousands) | ||||||||
Non-vested at September 24, 2021 | $ | |||||||
Granted | ||||||||
Vested | ( | |||||||
Forfeitures | ( | |||||||
Non-vested at December 31, 2021 | $ |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Expected term (in years) | ||||||||
Risk-free interest rate | % | % | ||||||
Expected stock price volatility | % | % | ||||||
Dividend yield | % | % |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Compensation expense | ||||||||
Stock options | $ | $ | ||||||
Restricted stock units | ||||||||
Employee stock purchase plan | ||||||||
Total stock-based compensation | ||||||||
Estimated benefit from income taxes | ( | ( | ||||||
Total stock-based compensation, net of tax | $ | $ |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Compensation expense | ||||||||
Cost of products and services | $ | $ | ||||||
Research and development | ||||||||
Sales and marketing | ||||||||
General and administrative | ||||||||
Total stock-based compensation expense | ||||||||
Estimated benefit from income taxes | ( | ( | ||||||
Total stock-based compensation, net of tax | $ | $ |
Authorization Period | Authorization Amount | ||||
Fiscal 2010: November 2009 | $ | ||||
Fiscal 2010: July 2010 | |||||
Fiscal 2011: July 2011 | |||||
Fiscal 2012: February 2012 | |||||
Fiscal 2015: October 2014 | |||||
Fiscal 2017: January 2017 | |||||
Fiscal 2018: July 2018 | |||||
Fiscal 2019: July 2019 | |||||
Fiscal 2021: July 2021 | |||||
Total | $ |
Quarterly Repurchase Activity | Shares Repurchased | Cost (1) | Average Price Paid Per Share (2) | ||||||||
(in thousands) | |||||||||||
Q1 - Quarter ended December 31, 2021 | $ | $ | |||||||||
Total | $ |
Fiscal Period | Announcement Date | Record Date | Payment Date | Cash Dividend Per Common Share | Estimated Dividend Payment (1) | ||||||||||||
Q1 - Quarter ended December 31, 2021 | February 3, 2022 | February 16, 2022 | February 23, 2022 | $ | $ | ||||||||||||
Fiscal Quarter Ended December 31, 2021 | ||||||||||||||
Investment Securities | Cash Flow Hedges | Currency Translation Adjustments | Total | |||||||||||
Beginning Balance | $ | $ | ( | $ | ( | $ | ( | |||||||
Other comprehensive income/(loss) before reclassifications: | ||||||||||||||
Unrealized gains/(losses) | ( | — | ( | |||||||||||
Foreign currency translation losses (1) | — | — | ( | ( | ||||||||||
Income tax effect - expense | ( | ( | ( | |||||||||||
Net of tax | ( | ( | ( | |||||||||||
Amounts reclassified from AOCI into earnings: | ||||||||||||||
Realized gains/(losses) (1) | ( | — | ||||||||||||
Income tax effect - benefit/(expense) (2) | ( | — | ||||||||||||
Net of tax | ( | — | ||||||||||||
Net current-period other comprehensive income/(loss) | ( | ( | ( | |||||||||||
Ending Balance | $ | ( | $ | $ | ( | $ | ( |
Fiscal Quarter Ended December 25, 2020 | ||||||||||||||
Investment Securities | Cash Flow Hedges | Currency Translation Adjustments | Total | |||||||||||
Beginning Balance | $ | $ | $ | ( | $ | ( | ||||||||
Other comprehensive income/(loss) before reclassifications: | ||||||||||||||
Unrealized gains/(losses) | ( | — | ||||||||||||
Foreign currency translation gains (1) | — | — | ||||||||||||
Income tax effect - benefit/(expense) | ( | ( | ( | |||||||||||
Net of tax | ( | |||||||||||||
Amounts reclassified from AOCI into earnings: | ||||||||||||||
Realized gains (1) | — | |||||||||||||
Income tax effect - expense (2) | ( | ( | — | ( | ||||||||||
Net of tax | — | |||||||||||||
Net current-period other comprehensive income/(loss) | ( | |||||||||||||
Ending Balance | $ | $ | $ | ( | $ | ( |
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Numerator: | ||||||||
Net income attributable to Dolby Laboratories, Inc. | $ | $ | ||||||
Denominator: | ||||||||
Weighted-average shares outstanding—basic | ||||||||
Potential common shares from options to purchase common stock | ||||||||
Potential common shares from restricted stock units | ||||||||
Potential common shares from employee stock purchase plan | ||||||||
Weighted-average shares outstanding—diluted | ||||||||
Net income per share attributable to Dolby Laboratories, Inc.: | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Antidilutive awards excluded from calculation: | ||||||||
Stock options | ||||||||
Restricted stock units | ||||||||
Employee stock purchase plan |
Severance | Leased facility exit costs and other costs | Total | |||||||||
Balance at September 25, 2020 | $ | $ | $ | ||||||||
Restructuring charges | |||||||||||
Cash payments and adjustments | ( | ( | ( | ||||||||
Balance at September 24, 2021 | $ | $ | $ | ||||||||
Restructuring credits | ( | ( | |||||||||
Cash payments and adjustments | |||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||
Payments Due By Fiscal Period | |||||||||||||||||||||||
Remainder of Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | Fiscal 2025 | Fiscal 2026 | Thereafter | Total | |||||||||||||||||
Naming rights | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Purchase obligations | |||||||||||||||||||||||
Donation commitments | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
Technology | Description | ||||
AAC & HE-AAC | An advanced digital audio codec solution with higher bandwidth efficiency used for a wide range of media applications. | ||||
AVC | A digital video codec with high bandwidth efficiency used in a wide range of media devices. | ||||
Dolby® AC-4 | A next-generation digital audio coding technology that increases transmission efficiency while delivering new audio experiences, including Dolby Atmos, to a wide range of playback devices. | ||||
Dolby Atmos® | An object-oriented audio technology for cinema and a wide range of media devices that allows sound to be precisely placed and moved anywhere in the listening environment including the overhead dimension. Dolby Atmos provides an immersive experience that can be provided via multiple Dolby audio coding technologies. | ||||
Dolby Digital® | A digital audio coding technology that provides multichannel sound to a variety of media applications. | ||||
Dolby Digital Plus™ | An advanced digital audio coding technology that offers more efficient audio transmission for a wide range of media applications and devices. | ||||
Dolby® TrueHD | A digital audio coding technology providing lossless encoding for premium quality media applications. | ||||
Dolby Vision® | An imaging technology combining high dynamic range and dynamic metadata to deliver ultra vivid colors, sharper contrasts, and richer details for cinema and a wide range of media devices. | ||||
Dolby Voice® | An audio communications technology with superior spatial perception, voice clarity, and background noise reduction that emulates the in-person meeting experience. | ||||
HEVC | A digital video codec with high bandwidth efficiency to support ultra-high definition experiences for a wide range of media devices. |
Fiscal Quarter Ended | |||||||||||
Market | December 31, 2021 | December 25, 2020 | Main Offerings Incorporating Our Technologies | ||||||||
Broadcast | 37% | 37% | Televisions and STBs | ||||||||
Mobile | 23% | 28% | Smartphones and Tablets | ||||||||
CE | 17% | 14% | DMAs, Blu-ray Disc devices, AVRs, Soundbars, and DVDs | ||||||||
PC | 10% | 9% | Windows and macOS operating systems | ||||||||
Other | 13% | 12% | Gaming consoles, Auto DVD, and Dolby Cinema | ||||||||
Total | 100% | 100% |
Product | Description | |||||||
Cinema | Cinema Imaging Products | Digital Cinema Servers used to load, store, decrypt, decode, watermark, and playback digital film files for presentation on digital cinema projectors and software used to encrypt, encode, and package digital media files for distribution. | ||||||
Cinema Audio Products | Cinema Processors, amplifiers, and loudspeakers used to decode, render, and optimally playback digital cinema soundtracks including those using Dolby Atmos. | |||||||
Other | Other Products | 3-D glasses and kits, broadcast hardware and software used to encode, transmit, and decode multiple channels of high-quality audio for DTV and HDTV distribution, monitors, accessibility solutions for hearing and visually impaired consumers, and Dolby.io. |
Fiscal Quarter Ended | Change | |||||||||||||
Licensing | December 31, 2021 | December 25, 2020 | $ | % | ||||||||||
Revenue | $332,284 | $373,005 | $(40,721) | (11)% | ||||||||||
Percentage of total revenue | 94% | 96% | ||||||||||||
Cost of licensing | 14,935 | 12,946 | 1,989 | 15% | ||||||||||
Gross margin | 317,349 | 360,059 | (42,710) | (12)% | ||||||||||
Gross margin percentage | 96% | 97% |
Fiscal Quarter Ended | |||||||||||||||||
Licensing Revenue By Market | December 31, 2021 | December 25, 2020 | |||||||||||||||
Broadcast | $ | 121,633 | 37 | % | $ | 139,300 | 37 | % | |||||||||
Mobile | 74,920 | 23 | % | 105,623 | 28 | % | |||||||||||
CE | 57,573 | 17 | % | 51,921 | 14 | % | |||||||||||
PC | 34,777 | 10 | % | 32,735 | 9 | % | |||||||||||
Other | 43,381 | 13 | % | 43,426 | 12 | % | |||||||||||
Total licensing revenue | $ | 332,284 | 100 | % | $ | 373,005 | 100 | % |
Factor | Licensing Revenue | Gross Margin | ||||||||||||
Mobile | â | Lower revenue due to lower recoveries and timing of revenue under contracts, partially offset by new licensees in our imaging patent programs | ßà | Lower gross margin due to lower revenue | ||||||||||
Broadcast | â | Lower revenue due to timing of revenue, the large true-up in the prior year and lower recoveries, partially offset by higher adoption of Dolby Atmos and Dolby Vision in TVs, and new imaging patent licensees | ||||||||||||
CE | á | Higher revenue from increased shipments of DMAs and soundbars, higher revenue from Dolby Atmos and Dolby Vision across devices, along with higher recoveries, partially offset by the large true-up in the prior year | ||||||||||||
PC | á | Higher revenue due to new licensees in our imaging patent programs and increased adoption of Dolby Vision | ||||||||||||
Other | â | Lower gaming units sold and lower audio patent revenue, offset by higher revenues from Dolby Cinema due to increased movie theater attendance | ||||||||||||
Fiscal Quarter Ended | Change | |||||||||||||
Products and Services | December 31, 2021 | December 25, 2020 | $ | % | ||||||||||
Revenue | $19,349 | $16,869 | $2,480 | 15% | ||||||||||
Percentage of total revenue | 6% | 4% | ||||||||||||
Cost of products and services | 17,774 | 22,358 | (4,584) | (21)% | ||||||||||
Gross margin | 1,575 | (5,489) | 7,064 | (129)% | ||||||||||
Gross margin percentage | 8% | (33)% |
Factor | Products and Services Revenue | Gross Margin | ||||||||||||
Products | ßà | No significant fluctuations | á | Higher gross margin primarily due to lower excess and obsolescence charges, from exiting our conference hardware business in the prior year, and higher absorption of manufacturing overhead, due to increased product sales | ||||||||||
Services | á | Higher revenue primarily due to higher adoption of our technologies and higher Dolby Cinema revenue | á | Higher gross margin primarily due to higher services revenue |
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Research and development | $68,824 | $63,772 | $5,052 | 8% | ||||||||||
Percentage of total revenue | 20% | 16% |
Category | Key Drivers | |||||||
Stock-based Compensation | á | Higher costs of $2.2 million primarily due to increased fair value of RSUs | ||||||
Compensation & Benefits | á | Higher costs of $3.2 million for higher salaries expense primarily due to increased headcount and the extra week in the current fiscal year, partially offset by lower costs of $2.2 million due to lower incentive compensation | ||||||
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Sales and marketing | $97,170 | $75,445 | $21,725 | 29% | ||||||||||
Percentage of total revenue | 28% | 19% |
Category | Key Drivers | |||||||
Marketing Programs | á | Higher costs of $10.8 million primarily due to marketing efforts for growth initiatives and branding activities | ||||||
Compensation & Benefits | á | Higher costs of $4.2 million for higher salaries expense primarily due to increased headcount, higher incentive compensation, and the extra week in the current fiscal year | ||||||
Stock-based Compensation | á | Higher costs of $2.5 million primarily due to increased fair value of RSUs | ||||||
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
General and administrative | $62,444 | $54,454 | $7,990 | 15% | ||||||||||
Percentage of total revenue | 18% | 14% |
Category | Key Drivers | |||||||
Credit Loss Expense | á | Higher costs of $3.0 million primarily due to collections of previously reserved amounts in the prior year that did not recur in the current year | ||||||
Compensation & Benefits | á | Higher costs of $2.8 million for higher salaries expense primarily due to increased headcount and the extra week in the current fiscal year | ||||||
Stock-based Compensation | á | Higher costs of $1.8 million primarily due to increased fair value of RSUs | ||||||
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Gain on sale of assets | $— | $(13,871) | $13,871 | (100)% | ||||||||||
Percentage of total revenue | —% | (4)% |
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Restructuring charges/(credits) | $(95) | $10,023 | $(10,118) | (101)% | ||||||||||
Percentage of total revenue | —% | 3% |
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Other income | $861 | $2,215 | $(1,354) | (61)% | ||||||||||
Percentage of total revenue | —% | 1% |
Category | Key Drivers | |||||||
Other Income | ßà | No significant fluctuations | ||||||
Fiscal Quarter Ended | ||||||||
December 31, 2021 | December 25, 2020 | |||||||
Provision for income taxes | $(11,432) | $(24,272) | ||||||
Effective tax rate | 12.5% | 14.5% |
Factor | Impact On Effective Tax Rate | |||||||
Stock-based Compensation | â | Higher benefit of related to the settlement of stock-based awards. | ||||||
Foreign Operations | â | Higher benefit from earned income in lower tax jurisdictions. | ||||||
Fiscal Quarter Ended | Change | |||||||||||||
December 31, 2021 | December 25, 2020 | $ | % | |||||||||||
Net (income)/loss attributable to controlling interest | $4 | $(7,492) | $7,496 | (100)% | ||||||||||
Percentage of total revenue | —% | (2)% |
December 31, 2021 | September 24, 2021 | ||||||||||
Cash and cash equivalents | $ | 1,056,686 | $ | 1,225,380 | |||||||
Short-term investments | 80,618 | 38,839 | |||||||||
Long-term investments | 120,988 | 62,819 | |||||||||
Accounts receivable, net | 241,449 | 232,609 | |||||||||
Accounts payable and accrued liabilities | 244,951 | 280,507 | |||||||||
Working capital | 1,411,855 | 1,444,781 | |||||||||
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Net cash provided by operating activities | $ | 31,660 | $ | 82,160 |
Factor | Impact On Cash Flows | |||||||
Net Income | â | Lower revenue and higher S&M expenses | ||||||
Gain on Sale of Assets | á | Non-cash adjustment to net income for gain recognized on the sale of property that was 51% owned by the controlling interest in fiscal 2021, that did not recur in fiscal 2022 | ||||||
Working Capital | â | Lower inflows due to decrease in accounts receivable, and decreased accounts payable and accrued liabilities | ||||||
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Net cash used in investing activities | $ | (126,111) | $ | (1,499) | |||||||
Factor | Impact On Cash Flows | |||||||
Purchase of Investments | â | Higher outflows for the purchase of marketable investment securities, and other investments | ||||||
Sale of Assets | â | Lower inflows for the sale of property in the prior year that was 51% owned by the controlling interest | ||||||
Fiscal Quarter Ended | |||||||||||
December 31, 2021 | December 25, 2020 | ||||||||||
Net cash used in financing activities | $ | (72,839) | $ | (46,340) | |||||||
Factor | Impact On Cash Flows | |||||||
Common Stock Issuance | â | Lower inflows from employee stock option exercises | ||||||
Distribution to Controlling Interest | á | Lower outflows for distributions to controlling interest due to the sale of property that was 51% owned by the controlling interest in fiscal 2021, that did not recur in fiscal 2022 | ||||||
Repurchase Activity | Total Shares Repurchased | Average Price Paid Per Share(1) | Total Shares Purchased As Part Of Publicly Announced Programs | Remaining Authorized Share Repurchases(2) | ||||||||||
September 25, 2021 - October 29, 2021 | — | $— | — | $291.3 million | ||||||||||
October 30, 2021 - November 26, 2021 | 293,860 | $87.88 | 293,860 | $265.5 million | ||||||||||
November 27, 2021 - December 31, 2021 | 114,648 | $85.03 | 114,648 | $255.8 million | ||||||||||
Total | 408,508 | 408,508 |
Exhibit Number | Description | Incorporated By Reference Herein | ||||||||||||||||||||||||||||||
Form | File Number | Date | Provided Herewith | |||||||||||||||||||||||||||||
10.1 | X | |||||||||||||||||||||||||||||||
10.2 | X | |||||||||||||||||||||||||||||||
10.3 | Form 8-K | 001-32431 | November 12, 2021 | |||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||
32.1+ | X | |||||||||||||||||||||||||||||||
101.INS | XBRL Instance Document | X | ||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.DEF | XBRL Extension Definition | X | ||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
DOLBY LABORATORIES, INC. | |||||
By: | /S/ ROBERT PARK | ||||
Robert Park | |||||
Senior Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
/s/ Lewis Chew | ||
Lewis Chew |
/s/ KEVIN J. YEAMAN | ||
Kevin J. Yeaman | ||
President and Chief Executive Officer (Principal Executive Officer) |
/s/ ROBERT PARK | ||
Robert Park | ||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ KEVIN J. YEAMAN | ||
Kevin J. Yeaman President and Chief Executive Officer (Principal Executive Officer) | ||
/s/ ROBERT PARK | ||
Robert Park Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
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Interim Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands |
Dec. 31, 2021
USD ($)
vote
$ / shares
shares
|
Sep. 24, 2021
USD ($)
vote
$ / shares
shares
|
---|---|---|
Allowance for doubtful accounts | $ | $ 9,900 | $ 8,744 |
Contract assets, allowance for credit losses | $ | $ 144 | $ 208 |
Class A Common Stock [Member] | ||
Common stock, par value (usd per share) | $ / shares | $ 0.001 | |
Common stock voting right per share (votes per share) | vote | 1 | |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 65,627,314 | 64,986,316 |
Common stock, shares outstanding (shares) | 65,627,314 | 64,986,316 |
Class B Common Stock [Member] | ||
Common stock, par value (usd per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock voting right per share (votes per share) | vote | 10 | 10 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 36,086,629 | 36,086,779 |
Common stock, shares outstanding (shares) | 36,086,629 | 36,086,779 |
Interim Condensed Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income including controlling interest | $ 80,010 | $ 142,690 |
Other comprehensive income: | ||
Currency translation adjustments gains/(losses), net of tax expense of ($34) and ($472) | (1,271) | 8,168 |
Unrealized losses on investments, net of tax benefit/(expense) of ($4) and $2 | (504) | (165) |
Unrealized gains on cash flow hedges, net of tax expense of ($31) and ($290) | 237 | 2,146 |
Other Comprehensive Income (Loss), Net of Tax | (1,538) | 10,149 |
Comprehensive income | 78,472 | 152,839 |
Less: comprehensive (income) attributable to controlling interest | 51 | (7,655) |
Comprehensive income attributable to Dolby Laboratories, Inc. | $ 78,523 | $ 145,184 |
Interim Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||
Currency translation adjustment, tax | $ (34) | $ (472) |
Unrealized gain (loss) on investments, tax | (4) | 2 |
Unrealized gains on cash flow hedges, tax | $ (31) | $ (290) |
Interim Condensed Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Related party rent expense: | ||
Included in operating expenses | $ 0 | $ 16 |
Included in net income attributable to controlling interest | $ 71 | $ 119 |
Basis Of Presentation |
3 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | Basis of Presentation Unaudited Interim Condensed Consolidated Financial Statements We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with U.S. GAAP, and with SEC rules and regulations, which allow for certain information and footnote disclosures that are normally included in annual financial statements prepared in accordance with U.S. GAAP to be condensed or omitted. In our opinion, these unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements for the fiscal year ended September 24, 2021 and include all adjustments necessary for fair presentation. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements for the fiscal year ended September 24, 2021, which are included in our Annual Report on Form 10-K filed with the SEC. The results for the fiscal quarter ended December 31, 2021 are not necessarily indicative of the results to be expected for any subsequent quarterly or annual financial period, including the fiscal year ending September 30, 2022. Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of Dolby Laboratories, Inc. and our wholly owned subsidiaries. In addition, we have consolidated the financial results of jointly owned affiliated companies in which our principal stockholder has a controlling interest. We report these controlling interests as a separate line in our condensed consolidated statements of operations as net income attributable to controlling interest and in our condensed consolidated balance sheets as a controlling interest. We eliminate all intercompany accounts and transactions upon consolidation. Operating Segments Since we operate as a single reportable segment, all required financial segment information is included in our unaudited interim condensed consolidated financial statements. This reflects the fact that our CODM, our Chief Executive Officer, evaluates our financial information and resources, and assesses the performance of these resources on a consolidated basis. Use of Estimates The preparation of our financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported and disclosed in our unaudited interim condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include estimated shipments by our licensees for which we are owed a sales-based royalty. These estimates involve the use of historical data and judgment for several key attributes including industry estimates of expected shipments, the percentage of markets using our technologies, and average sale prices. Our estimates of royalty-based revenue also take into consideration the macroeconomic effect of global events, such as the coronavirus pandemic ("COVID-19") or other natural disasters which may impact our licensees' supply chain activities as well as demand for shipments. Additional significant items subject to such estimates and assumptions include ESPs for performance obligations within revenue arrangements; allowances for credit losses for accounts receivable; carrying values of inventories and certain PP&E, goodwill and intangible assets; fair values of investments; accrued liabilities including liabilities for unrecognized tax benefits, deferred income tax assets and liabilities, and stock-based compensation. Actual results could differ from our estimates. Fiscal Year Our fiscal year is a 52 or 53 week period ending on the last Friday in September. The fiscal periods presented herein include the 14 week period ended December 31, 2021 and the 13 week period ended December 25, 2020. Our fiscal year ending September 30, 2022 (fiscal 2022) consists of 53 weeks, and our fiscal year ended September 24, 2021 (fiscal 2021) consisted of 52 weeks.
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Summary Of Significant Accounting Policies |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Recently Issued Accounting Standards Adopted Standards Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which modifies and eliminates certain exceptions to the general principles of ASC 740, Income Taxes. We adopted this standard in the first quarter of fiscal 2022, and it did not have a material impact on our condensed consolidated financial statements. Standards Not Yet Adopted Business Combinations. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by an acquirer in accordance with ASC 606, Revenue from Contracts with Customers. Currently, we recognize acquired contract assets and contract liabilities at fair value as of the acquisition date, in accordance with ASC 805. This standard will be effective for Dolby beginning September 30, 2023 on a prospective basis, but early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition We enter into revenue arrangements with our customers to license technologies, trademarks and patents for sound, imaging and voice solutions, and to sell products and services. We recognize revenue when we satisfy a performance obligation by transferring control over the use of a license, product, or service to a customer. A. Identification of the Contract or Contracts with Customers We generally determine that a contract with a customer exists upon the execution of an agreement and after consideration of collectability, which could include an evaluation of the customer's payment history, the existence of a standby letter-of-credit between the customer’s financial institution and our financial institution, public financial information, and other factors. At contract inception, we also evaluate whether two or more non-standard agreements with a customer should be combined and accounted for as a single contract. B. Identification of Performance Obligations in a Contract We generate revenue principally from the following sources, which represent performance obligations in our contracts with customers: •Licensing. We license our technologies, including patents, to a range of customers who incorporate them into their products for enhanced audio, imaging and voice functionality across broadcast, mobile, CE, PC, gaming, and other markets. •Product Sales. We design and provide audio and imaging products for the cinema, television, broadcast, communications, and entertainment industries. •Services. We provide various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment, including equipment training, mixing room alignment, equalization, as well as audio, color and light image calibration. We also offer a developer platform, Dolby.io, that enables developers to access our technologies through audio and video APIs for building high-quality communications, media, and streaming solutions. •PCS. We provide PCS for products sold and for equipment leased, and we support the implementation of our licensing technologies in our licensees’ products. •Equipment Leases. We collaborate with established cinema exhibitors to offer Dolby Cinema, a branded premium cinema offering for movie audiences by leasing equipment and licensing our IP. We also lease hardware that facilitates the Dolby conferencing experience, including the Dolby Conference Phone, and the Dolby Voice Room solution. •Licensing Administration Fees. We generate service fees for managing patent pools on behalf of third party patent owners through our wholly-owned subsidiary, Via. Some of our revenue arrangements include multiple performance obligations, such as hardware, software, support and maintenance, and extended warranty services. We evaluate whether promised products and services are distinct performance obligations. The majority of our arrangements with multiple performance obligations pertain to our digital cinema server and processor sales that include the following distinct performance obligations to which we allocate portions of the transaction price based on their stand-alone selling price: •Digital cinema server hardware and embedded software, which is highly dependent on and highly interrelated with the hardware. Accordingly, the hardware and embedded software represent a single performance obligation. •The right to support and maintenance, which is included with the purchase of the digital cinema server hardware, is a distinct performance obligation. •The right to receive commissioning services is a distinct performance obligation within the sale of the Dolby Atmos Cinema Processor. These services consist of the review of venue designs specifying proposed speaker placement as well as calibration services performed for installed speakers to ensure optimal playback. C. Determination of Transaction Price for Performance Obligations in a Contract After identifying the distinct performance obligations, we determine the transaction price in accordance with the terms of the underlying executed contract which may include variable consideration such as discounts, rebates, refunds, rights of returns, and incentives. We assess and update, if necessary, the amount of variable consideration to which we are entitled for each reporting period. At the end of each reporting period, we estimate and accrue a liability for returns and adjustments as a reduction to revenue based on several factors, including past returns history. With the exception of our sales-based royalties, we evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments that occur over time. For example, some of our licensing arrangements include payment terms greater than one year from when we transfer control of our IP to a licensee and the receipt of the final payment for that IP. If a significant financing component exists, we classify a portion of the transaction price as interest income, instead of recognizing all of the transaction price as revenue. We do not adjust the transaction price for the effects of financing if, at contract inception, the period between the transfer of control to a customer and final payment is expected to be one year or less. D. Allocation of Transaction Price to Distinct Performance Obligations in a Contract For our sales-based royalties where the license is the predominant item to which the royalties relate, we present all revenue as licensing. For revenue arrangements that include multiple performance obligations, we determine the stand-alone selling price for each distinct performance obligation based on the actual selling prices made to customers. If the performance obligation is not sold separately, we estimate the stand-alone selling price. We do so by considering market conditions such as competitor pricing strategies, customer specific information and industry technology lifecycles, internal conditions such as cost and pricing practices, or applying the residual approach method when the selling price of the good, most commonly a license, is highly variable or uncertain. Once the transaction price, including any variable consideration, has been determined, we allocate the transaction price to the performance obligations identified in the contract, and recognize revenue as or when control is transferred for each distinct performance obligation. E. Revenue Recognition as Control is Transferred to a Customer We generate our licensing revenue by licensing our technologies and patents to various types of licensees, such as chip manufacturers ("implementation licensees"), consumer product manufacturers, software vendors, and communications service providers. Our revenue recognition policies for each of these arrangements are summarized below. Initial fees from implementation licensees. Implementation licensees incorporate our technologies into their chipsets that, once approved by Dolby, are available for purchase by OEMs for use in end-user products. Implementation licensees only pay us a nominal initial fee on contract execution as consideration for the ongoing services that we provide to assist in their implementation process. Revenue from these initial fees is recognized ratably over the contractual term as a component of licensing revenue. Sales-based licensing fees. In our royalty bearing licensing agreements with OEMs, control is transferred upon the later of contract execution or the contract’s effective date. We apply the royalty exception, which requires that we recognize sales-based royalties when the sales occur based on our estimates. These estimates involve the use of historical data and judgment for several key attributes including industry estimates of expected shipments, the percentage of markets using our technologies, and average sale prices. Generally, our estimates represent the current period’s shipments to which we expect our licensees to submit royalty statements in the following quarter. Upon receipt of royalty statements from the licensees with the actual reporting of sales-based royalties that we estimated previously, we record a favorable or unfavorable adjustment based on the difference, if any, between estimated and actual sales. In the first quarter of fiscal 2022, we recorded an unfavorable adjustment of approximately $6 million, which was primarily related to July through September shipments and largely based on actual royalty statements received from licensees. Fixed and guaranteed licensing fees. In certain cases, our arrangements require the licensee to pay fixed, non-refundable fees. In these cases, control is transferred and fees are recognized upon the later of contract execution or the effective date. Additionally and separate from initial fees from implementation licensees, our sales- and usage-based licensing agreements include a nominal fee, which is also recognized at a point in time in which control of the IP has been transferred. Revenue from these arrangements is included as a component of licensing revenue. Recoveries. Through compliance efforts, we identify misreported licensed activity related to non-current periods. We may record a favorable or unfavorable revenue adjustment in connection with the findings from these compliance efforts generally upon resolution with the licensee through agreement of the findings, or upon receipt of the licensee’s correction statement. Revenue from these arrangements is included as a component of licensing revenue. We undertake activities aimed at identifying potential unauthorized uses of our technologies, which when successful result in the recognition of revenue. Recoveries stem from third parties who agree to remit payments to us based on past use of our technology. In these scenarios, a legally binding contract did not exist at time of use of our technology, and therefore, we recognize revenue recoveries upon execution of the agreement as that is the point in time to which a contract exists and control is transferred. This revenue is classified as licensing revenue. In general, we classify legal costs associated with activities aimed at identifying potential unauthorized uses of our technologies, auditing existing licensees, and on occasion, pursuing litigation as S&M in our condensed consolidated statements of operations. We recognize licensing revenue gross of withholding taxes, which our licensees remit directly to their local tax authorities, and for which we receive a partial foreign tax credit in our income tax provision. In addition to our licensing arrangements, we also enter into arrangements to deliver products and services. Product Sales. Revenue from the sale of products is recognized when the customer obtains control of the promised good or service, which is generally upon shipment. Payments are generally made within 90 days of sale. Services. We provide various services, such as engineering services related to movie soundtrack print mastering, equipment training and maintenance, mixing room alignment, equalization, and image calibration, which we bill on a fixed fee and time and materials basis. Most of these services are of a short duration and are recognized as control of the performance obligations are transferred which is when the related services are performed. Cloud Services. We provide access to audio and video APIs through our developer platform as well as cloud encoding services, generally, on either a consumption or subscription basis. Revenue related to cloud services provided on a consumption basis is recognized when the customer utilizes the services, based on the quantity of services consumed. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract term as the customer receives and consumes the benefits of the cloud services. Collaborative Arrangements. We collaborate with established cinema exhibitors to offer Dolby Cinema, a branded premium cinema offering for movie audiences. Under such collaborations, Dolby and the exhibitor are both active participants, and share the risks and rewards associated with the business. Accordingly, these collaborations are governed by revenue sharing arrangements under which Dolby receives revenue based on box office receipts, reported to Dolby by exhibitor partners on a monthly or quarterly basis, our proprietary designs and trademarks as well as for the use of our equipment at the exhibitor's venue. The use of our product solution meets the definition of a lease, and for the related portion of Dolby's share of revenue, we apply ASC 842, Leases, and recognize revenue based on monthly box office reports from exhibitors. Our revenue share is recognized as licensing revenue in our condensed consolidated statements of operations. In addition, we also enter into hybrid agreements where a portion of our revenue share involves guaranteed payments, which in some cases result in classifying the arrangement as a sales-type lease. In such arrangements, we consider control to transfer at the point in time to which we have installed and tested the equipment, at which point we record such guaranteed payments as product revenue. Via Administration Fee. We generate service fees for managing patent pools on behalf of third party patent owners through our wholly-owned subsidiary, Via. As an agent to licensors in the patent pool, Via receives a share of the sales-based royalty that the patent pool licensors earn from licensees. As such, we apply the sales-based royalty exception as the service provided is directly related to the patent pool licensors’ provision of IP, which results in recognition based on estimates of the licensee’s quarter shipments that use the pool’s patents. In addition to sales-based royalties, Via also has contracts where the fees are fixed. The revenue share Via receives from licensors on fixed fee contracts is recognized over the term in which we are providing services associated with the fixed fee contract. We recognize our administrative fees net of the consideration paid to the patent licensors in the pool as licensing revenue. Deferred revenue, which is a component of contract liabilities, represents amounts that are ultimately expected to be recognized as revenue, but for which we have yet to satisfy the performance obligation. As of December 31, 2021, we had $43.7 million of remaining performance obligations, 39% of which we expect to recognize as revenue in fiscal 2022, 21% in fiscal 2023, and the balance of 40% in fiscal years beyond 2023. F. Disaggregation of revenue The following table presents a summary of the composition of our revenue for all periods presented (in thousands, except percentage amounts):
The following table presents the composition of our licensing revenue for all periods presented (in thousands, except percentage amounts):
We license our technologies in approximately 60 countries, and our licensees distribute products that incorporate our technologies throughout the world. We generate the majority of our revenue from outside the U.S. Geographic data for our licensing revenue is based on the location of our licensees’ headquarters, products revenue is based on the destination to which we ship our products, and services revenue is based on the location where services are performed. The following table presents the composition of our revenue by geographic location for all periods presented (in thousands, except percentage amounts):
G. Contract balances Our contract assets represent rights to consideration from licensees for the use of our IP that we have estimated in a given period in the absence of receiving actual royalty statements from licensees. These estimates reflect our best judgment at that time, and are developed using a number of inputs, including historical data, industry estimates of expected shipments, anticipated sales price and performance, and third-party data supporting the percentage of markets using our technologies. In the event that our estimates differ from actual amounts reported, we record an adjustment in the quarter in which the royalty statement is received which is typically the quarter following our estimate. Actual amounts reported are typically paid within 60 days following the end of the quarter of shipment. The main drivers for change in the contract assets account are variances in quarterly estimates, and to a lesser degree, timing of receipt of actual royalty statements. Our contract liabilities consist of advance payments and billings in advance of performance, deferred revenue that is typically satisfied within one year, and deferred interest where we have significant financing. The non-current portion of contract liabilities is separately disclosed in our condensed consolidated balance sheets. We present the net contract asset or liability when we have both contract assets and contract liabilities for a single contract. In the first quarter of fiscal 2022, we recognized $7.1 million from prior period deferred revenue. The following table presents a summary of the balances to which contract assets and liabilities related to revenue are recorded for all periods presented (in thousands, except percentage amounts):
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Composition Of Certain Financial Statement Captions |
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Composition Of Certain Financial Statement Captions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition Of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions The following tables present detailed information from our condensed consolidated balance sheets as of December 31, 2021 and September 24, 2021 (in thousands). Accounts Receivable and Contract Assets
Accounts receivable, gross includes unbilled accounts receivable balances of $105.1 million and $97.5 million as of December 31, 2021 and September 24, 2021, respectively, related to amounts that are contractually owed. The unbilled balance represents our unconditional right to consideration related to fixed fee contracts which we are entitled to as a result of satisfying, or partially satisfying, performance obligations, as well as Via's unconditional right to consideration related to their patent administration programs.
Allowance for credit losses includes the provision for estimated credit losses on our sales-type leases of $0.5 million as of December 31, 2021. The allowance for credit losses on these leases as of September 24, 2021 was not material. Inventories
Inventories are stated at the lower of cost and net realizable value. Inventory with a consumption period expected to exceed twelve months is recorded within other non-current assets in our condensed consolidated balance sheets. We have included $1.6 million and $1.9 million of raw materials inventory within non-current assets as of December 31, 2021 and September 24, 2021, respectively. Based on anticipated inventory consumption rates, and aside from existing write-downs due to excess inventory, we do not believe that material risk of obsolescence exists prior to ultimate sale. Prepaid Expenses And Other Current Assets
Accrued Liabilities
Other Non-Current Liabilities
(1) Refer to Note 12 "Income Taxes" for additional information related to our tax liabilities.
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Investments & Fair Value Measurements |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments & Fair Value Measurements | . Investments and Fair Value Measurements We use cash holdings to purchase investment grade securities diversified among security types, industries, and issuers. All of our investments in debt securities are measured at fair value, and are recorded within cash equivalents and both short-term and long-term investments in our condensed consolidated balance sheets. With the exception of our mutual fund investments held in our SERP and classified as trading securities and our other long-term investments, all of our investments are classified as AFS securities. Derivative contracts are used to hedge currency risk, these are carried at fair value and classified as other assets and other liabilities. Our investments in debt securities primarily consist of corporate bonds, municipal debt securities, government bonds, commercial paper, U.S. agency securities, and certificates of deposit. In addition, our cash and cash equivalents also consist of highly-liquid money market funds. Consistent with our investment policy, none of our municipal debt investments are supported by letters of credit or standby purchase agreements. Our cash and investment portfolio consisted of the following (in thousands):
(1)Other investments as of December 31, 2021 is comprised of an equity method investment and an equity security without a readily determinable fair value measured under the "measurement alternative" (at cost, minus impairment or adjusted for any observable price changes). The equity method investment is measured at cost minus impairment, if any, adjusted for our proportionate share of the investee's net income or loss. Our share of the investee's net income or loss is included in other income (expense), net on the condensed consolidated statements of operations, and was not material in the first quarter of fiscal 2022 and first quarter of fiscal 2021.
(1)Other investments as of September 24, 2021 is comprised of one equity method investment, which is measured at cost minus impairment, if any, adjusted for our proportionate share of the investee’s net income or loss. Fair Value Hierarchy. Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. We minimize the use of unobservable inputs and use observable market data, if available, when determining fair value. We classify our inputs to measure fair value using the following three-level hierarchy: Level 1: Quoted prices in active markets at the measurement date for identical assets and liabilities. We base the fair value of our Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. Level 2: Prices may be based upon quoted prices in active markets or inputs not quoted on active markets but are corroborated by market data. We obtain the fair value of our Level 2 financial instruments from a professional pricing service, which may use quoted market prices for identical or comparable instruments, or model driven valuations using observable market data or inputs corroborated by observable market data. To validate the fair value determination provided by our primary pricing service, we perform quality controls over values received which include comparing our pricing service provider’s assessment of the fair values of our investment securities against the fair values of our investment securities obtained from another independent source, reviewing the pricing movement in the context of overall market trends, and reviewing trading information from our investment managers. In addition, we assess the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. The fair value of the currency derivatives are calculated from market spot rates, forward rates, interest rates, and credit ratings at the end of the period. Level 3: Unobservable inputs are used when little or no market data is available and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Securities In Gross Unrealized Loss Position. We periodically evaluate our investments for other-than- temporary declines in fair value. The unrealized losses on our AFS securities were primarily the result of unfavorable changes in interest rates subsequent to the initial purchase of these securities. The following table presents the gross unrealized losses and fair value for those AFS securities that were in an unrealized loss position for less than twelve months as of December 31, 2021 and September 24, 2021 (in thousands):
As of December 31, 2021 and September 24, 2021, there were no gross unrealized losses and no AFS securities that were in an unrealized loss position for twelve months or greater. Although we had certain securities that were in an unrealized loss position for less than twelve months as of December 31, 2021 and September 24, 2021, we expect to recover the full carrying value of these securities. Investment Maturities. The following table summarizes the amortized cost and estimated fair value of the AFS securities within our investment portfolio based on stated maturities as of December 31, 2021 and September 24, 2021, which are recorded within cash equivalents and both short and long-term investments in our condensed consolidated balance sheets (in thousands):
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | . Property, Plant, and Equipment PP&E are recorded at cost, with depreciation expense included in cost of licensing, cost of products and services, R&D, S&M, and G&A expenses in our condensed consolidated statements of operations. As of December 31, 2021 and September 24, 2021, PP&E consisted of the following (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases As Lessee As a lessee, we enter into contracts to access and utilize office space, including those payable to our principal stockholder and portions attributable to the controlling interests in our consolidated subsidiaries. We determine if a contract contains a lease based on whether we have the right to obtain substantially all of the economic benefits from the use of an identified asset and whether we have the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which we do not own. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our IBR, because the interest rate implicit in our leases is not readily determinable. The IBR is a hypothetical rate based on our understanding of what our credit rating would be and resulting interest we would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments are included in our lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred. The lease term of operating leases vary from less than a year to 10 years. We have leases that include one or more options to extend the lease term for up to 5 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. The components of lease expense were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows:
The following table presents the maturity analysis of lease liabilities (in thousands):
As Lessor As a lessor, we lease our Dolby Cinema product solution to exhibitors and Dolby Voice equipment to cloud conferencing service providers. The terms of these leases vary from 4 to 10 years. Lease components consist of fixed payments and/or variable lease payments based on contracted percentages of revenue. Generally, leases do not grant any right to the lessee to purchase the underlying asset at the end of the lease term. Dolby Cinema lease arrangements have options to extend the lease term at expiration by increments ranging from 1 to 5 years. Assets provided under an operating lease are carried at cost within property, plant and equipment, net on the condensed consolidated balance sheets, and depreciated over the useful life of the asset using the straight-line method. Fixed operating lease payments are recognized on a straight-line basis over the lease term to revenue. Variable lease payments received under our Dolby Cinema operating leases are computed as shares of lessees' box office revenue and recognized to revenue in the period that box office sales occur. Lease incentive payments we make to lessees are amortized as a reduction in revenue over the lease term. The components of lease income were as follows (in millions):
If a lease is classified as a sales-type lease, the carrying amount of the asset is derecognized from property, plant and equipment, net, and a net investment in the lease is recorded. The net investment in the lease is measured at commencement date as the sum of the lease receivable and the estimated residual value of the equipment. The unguaranteed residual value of the equipment is determined as the estimated carrying value of the asset at the end of the lease term had the asset been depreciated on a straight-line basis. The unguaranteed residual value of sales-type leases was $0.8 million and $0.8 million as of December 31, 2021 and September 24, 2021, respectively. Selling profit or loss arising from a sales-type lease is recorded at lease commencement and presented on a gross basis. Over the term of the lease, we recognize interest income on the net investment in the lease. We also recognize variable lease payments, if any, which are not material and not included in the net investment in the lease. The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
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Leases | Leases As Lessee As a lessee, we enter into contracts to access and utilize office space, including those payable to our principal stockholder and portions attributable to the controlling interests in our consolidated subsidiaries. We determine if a contract contains a lease based on whether we have the right to obtain substantially all of the economic benefits from the use of an identified asset and whether we have the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which we do not own. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our IBR, because the interest rate implicit in our leases is not readily determinable. The IBR is a hypothetical rate based on our understanding of what our credit rating would be and resulting interest we would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments are included in our lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred. The lease term of operating leases vary from less than a year to 10 years. We have leases that include one or more options to extend the lease term for up to 5 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. The components of lease expense were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows:
The following table presents the maturity analysis of lease liabilities (in thousands):
As Lessor As a lessor, we lease our Dolby Cinema product solution to exhibitors and Dolby Voice equipment to cloud conferencing service providers. The terms of these leases vary from 4 to 10 years. Lease components consist of fixed payments and/or variable lease payments based on contracted percentages of revenue. Generally, leases do not grant any right to the lessee to purchase the underlying asset at the end of the lease term. Dolby Cinema lease arrangements have options to extend the lease term at expiration by increments ranging from 1 to 5 years. Assets provided under an operating lease are carried at cost within property, plant and equipment, net on the condensed consolidated balance sheets, and depreciated over the useful life of the asset using the straight-line method. Fixed operating lease payments are recognized on a straight-line basis over the lease term to revenue. Variable lease payments received under our Dolby Cinema operating leases are computed as shares of lessees' box office revenue and recognized to revenue in the period that box office sales occur. Lease incentive payments we make to lessees are amortized as a reduction in revenue over the lease term. The components of lease income were as follows (in millions):
If a lease is classified as a sales-type lease, the carrying amount of the asset is derecognized from property, plant and equipment, net, and a net investment in the lease is recorded. The net investment in the lease is measured at commencement date as the sum of the lease receivable and the estimated residual value of the equipment. The unguaranteed residual value of the equipment is determined as the estimated carrying value of the asset at the end of the lease term had the asset been depreciated on a straight-line basis. The unguaranteed residual value of sales-type leases was $0.8 million and $0.8 million as of December 31, 2021 and September 24, 2021, respectively. Selling profit or loss arising from a sales-type lease is recorded at lease commencement and presented on a gross basis. Over the term of the lease, we recognize interest income on the net investment in the lease. We also recognize variable lease payments, if any, which are not material and not included in the net investment in the lease. The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table outlines changes to the carrying amount of goodwill (in thousands):
Intangible Assets Our intangible assets are stated at their original cost less accumulated amortization, and principally consist of acquired patents, technology, customer relationships and contracts, and trademarks. Intangible assets subject to amortization consisted of the following (in thousands):
During the first quarter of fiscal 2022, we purchased various patents for purchase consideration of $11.4 million and upon acquisition, these intangible assets had a weighted-average useful life of 16.0 years. These intangible assets facilitate our R&D efforts, technologies, and potential product offerings. Amortization expense for our intangible assets is included in cost of licensing, cost of products and services, R&D, S&M, and G&A expenses in our condensed consolidated statements of operations. Amortization expense was $8.0 million and $7.3 million in the first quarter of fiscal 2022 and 2021, respectively. As of December 31, 2021, expected amortization expense of our intangible assets in future fiscal periods was as follows (in thousands):
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Stockholders' Equity And Stock-Based Compensation |
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Stockholders' Equity And Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity And Stock-Based Compensation | Stockholders' Equity and Stock-Based Compensation We provide stock-based awards as a form of compensation for employees, officers, and directors. We have issued stock-based awards in the form of stock options and RSUs under our equity incentive plans, as well as shares under our ESPP. Common Stock - Class A and Class B Our Board of Directors has authorized two classes of common stock, Class A and Class B. As of December 31, 2021, we had authorized 500,000,000 Class A shares and 500,000,000 Class B shares. As of December 31, 2021, we had 65,627,314 shares of Class A common stock and 36,086,629 shares of Class B common stock issued and outstanding. Holders of our Class A and Class B common stock have identical rights, except that holders of our Class A common stock are entitled to one vote per share and holders of our Class B common stock are entitled to ten votes per share. Shares of Class B common stock can be converted to shares of Class A common stock at any time at the option of the stockholder and automatically convert upon sale or transfer, except for certain transfers specified in our amended and restated certificate of incorporation. Stock Incentive Plans Following shareholder approval in January 2005, our 2005 Stock Plan was adopted by our Board of Directors on February 16, 2005. In February 2020, our stockholders approved the name change of our 2005 Stock Plan to the 2020 Stock Plan and certain other changes described in our proxy statement for our 2020 annual meeting of stockholders. Our 2020 Stock Plan, as amended and restated, provides for the ability to grant incentive stock options, non-qualified stock options, restricted stock, RSUs, stock appreciation rights, deferred stock units, performance units, performance bonus awards, and performance shares. A total of 55.0 million shares of our Class A common stock have been authorized for issuance under the 2020 Stock Plan in total since inception of the plan. For awards granted prior to February 2011, any shares subject to an award with a per share price less than the fair market value of our Class A common stock on the date of grant and any shares subject to an outstanding RSU award will be counted against the authorized share reserve as two shares for every one share subject to the award, and if returned to the 2020 Stock Plan, such shares will be counted as two shares for every one share returned. For those awards granted from February 2011 onward, any shares subject to an award with a per share price less than the fair market value of our Class A common stock on the date of grant and any shares subject to an outstanding RSU award will be counted against the authorized share reserve as 1.6 shares for every one share subject to the award, and if returned to the 2020 Stock Plan, such shares will be counted as 1.6 shares for every one share returned. Stock Options. Stock options are granted at fair market value on the date of grant. Options granted to employees and officers generally vest over four years, with 25% of the shares subject to the option becoming exercisable on the one-year anniversary of the date of grant and the balance of the shares vesting in equal monthly installments over the following 36 months. These options expire on the earlier of ten years after the date of grant or three months after termination of service. All options granted vest over the requisite service period and upon the exercise of stock options, we issue new shares of Class A common stock under the 2020 Stock Plan. Our 2020 Stock Plan also allows us to grant stock awards which vest based on the satisfaction of specific performance criteria. Performance-Based Stock Options. In fiscal 2016, we began granting PSOs to our executive officers with shares of our Class A common stock underlying such options. The contractual term for the PSOs is seven years, with vesting contingent upon market-based performance conditions, representing the achievement of specified Dolby annualized TSR targets at the end of a three-year measurement period following the date of grant. If the minimum conditions are met, the PSOs earned will cliff vest on the third anniversary of the grant date, upon certification of achievement of the performance conditions by our Compensation Committee. Anywhere from 0% to 125% of the shares subject to a PSO may vest based on achievement of the performance conditions at the end of the three-year performance period. In valuing the PSOs which will be recognized as compensation cost, we used a Monte Carlo valuation model. Aside from the use of an expected term for the PSOs commensurate with their shorter contractual term, the nature of the valuation inputs used in the Monte Carlo valuation model were consistent with those used to value our non-performance based options granted under the 2020 Stock Plan. Compensation cost is being amortized on a straight-line basis over the requisite service period. The following table summarizes information about PSOs granted to our executive officers that have vested:
(1)Aggregate shares exercisable at vest date does not include any shares that were cancelled before the vest date after they were granted. As of December 31, 2021, an aggregate of 484,129 shares of PSOs were exercisable and outstanding. The following table summarizes information about stock options issued under our 2020 Stock Plan:
(1)Aggregate intrinsic value is based on the closing stock price of our Class A common stock on December 31, 2021 of $95.22 and excludes the impact of options that were not in-the-money. Restricted Stock Units. Beginning in fiscal 2008, we began granting RSUs to certain directors, officers and employees. Awards granted to employees and officers generally vest over four years, with equal annual cliff-vesting. Awards granted from November 2010 onward to ongoing directors generally vest over approximately one year. Awards granted to new directors from fiscal 2014 onward vest on the earlier of the first anniversary of the award’s date of grant, or the day immediately preceding the date of the next annual meeting of stockholders that occurs after the award’s date of grant. Our 2020 Stock Plan also allows us to grant RSUs that vest based on the satisfaction of specific performance criteria. At each vesting date, the holder of the award is issued shares of our Class A common stock. Compensation expense from these awards is equal to the adjusted fair market value of our Class A common stock on the date of grant, discounted to account for dividend payments forgone during the vesting period, and is recognized on a straight-line basis over the requisite service period. Certain grants may have other vesting conditions or other award terms as approved by the Compensation Committee of our Board of Directors. Performance-Based Restricted Stock Units. In the first quarter of fiscal 2020, we began granting PSUs to our executive officers with shares of our Class A common stock underlying such awards. The terms of the PSU Agreement adopted in the first quarter fiscal 2020 provide for the grant of PSUs to our executive officers contingent on Dolby's achievement of annualized TSR targets measured against a comparator index over a three-year performance period following the date of grant. Anywhere from 0% to 200% of eligible restricted stock units may vest based on achievement of the performance conditions at the end of the three-year performance period. In valuing the PSUs which will be recognized as compensation cost, we used a Monte Carlo valuation model. Compensation cost is being amortized on a straight-line basis over the requisite service period. Certain grants may have other vesting conditions or other award terms as approved by the Compensation Committee of our Board of Directors. On December 15, 2021, we granted PSUs to our executive officers vesting for an aggregate of 60,301 shares at the target amount, which would vest at 120,602 shares at 200% of the target award amount. On December 15, 2020, we granted PSUs to our executive officers vesting for an aggregate of 66,138 shares at the target amount, which would vest at 132,276 shares at 200% of the target award amount. On December 16, 2019, we granted PSUs to our executive officers vesting for an aggregate of 62,000 shares at the target award amount, which would vest at 124,000 shares at 200% of the target award amount. As of December 31, 2021, PSUs that would vest for an aggregate of 162,846 shares at the target award amount (325,692 shares at 200% of the target award amount) were outstanding. The following table summarizes information about RSUs issued under our 2020 Stock Plan:
Employee Stock Purchase Plan. Our plan allows eligible employees to have up to 10 percent of their eligible compensation withheld and used to purchase Class A common stock, subject to a maximum of $25,000 worth of stock purchased in a calendar year or no more than 1,000 shares in an offering period, whichever is less. An offering period consists of successive six-month purchase periods, with a look back feature to our stock price at the commencement of a one-year offering period. The plan provides for a discount equal to 15 percent of the lower of the closing price of our Class A common stock on the NYSE on the first and last day of the offering periods. The plan also includes an automatic reset feature that provides for an offering period to be reset and recommenced to a new lower-priced offering if the offering price of a new offering period is less than that of the immediately preceding offering period. Stock Option Valuation Assumptions We use the Black-Scholes option pricing model to determine the estimated fair value of employee stock options at the date of the grant. The Black-Scholes model includes inputs that require us to make certain estimates and assumptions regarding the expected term of the award, as well as the future risk-free interest rate, and the volatility of our stock price over the expected term of the award. Expected Term. The expected term of an award represents the estimated period of time that options granted will remain outstanding, and is measured from the grant date to the date at which the option is either exercised or canceled. Our determination of the expected term involves an evaluation of historical terms and other factors such as the exercise and termination patterns of our employees who hold options to acquire our Class A common stock, and is based on certain assumptions made regarding the future exercise and termination behavior. Risk-Free Interest Rate. The risk-free interest rate is based on the yield curve of U.S. Treasury instruments in effect on the date of grant. In determining an estimate for the risk-free interest rate, we use average interest rates based on these instruments’ constant maturities with a term that approximates and corresponds with the expected term of our awards. Expected Stock Price Volatility. The expected volatility represents the estimated volatility in the price of our Class A common stock over a time period that approximates the expected term of the awards, and is determined using a blended combination of historical and implied volatility. Historical volatility is representative of the historical trends in our stock price for periods preceding the measurement date for a period that is commensurate with the expected term. Implied volatility is based upon externally traded option contracts of our Class A common stock. Dividend Yield. The dividend yield is based on our anticipated dividend payout over the expected term of our option awards. Dividend declarations and the establishment of future record and payment dates are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of our stockholders. The dividend policy may be changed or canceled at the discretion of the Board of Directors at any time. The weighted-average assumptions used in the determination of the fair value of our stock options were as follows:
Stock-Based Compensation Expense Stock-based compensation expense for equity awards granted to employees is determined by estimating their fair value on the date of grant, and recognizing that value as an expense on a straight-line basis over the requisite service period in which our employees earn the awards. Compensation expense related to these equity awards is recognized net of estimated forfeitures, which reduce the expense recorded in the condensed consolidated statements of operations. The selection of applicable estimated forfeiture rates is based on an evaluation of trends in our historical forfeiture data with consideration for other potential driving factors. If in subsequent periods actual forfeitures significantly differ from our initial estimates, we will revise such estimates accordingly. The following two tables separately present stock-based compensation expense both by award type and classification in our condensed consolidated statements of operations (in thousands): Expense - By Award Type
Expense - By Income Statement Line Item Classification
The tax benefit that we recognize from shares issued under our ESPP is excluded from the tables above. The tax benefit recognized was not material in the first quarter of fiscal 2022 and first quarter of fiscal 2021. Unrecognized Compensation Expense. As of December 31, 2021, total unrecognized compensation expense associated with employee stock options expected to vest was approximately $18.7 million, which is expected to be recognized over a weighted-average period of 2.5 years. As of December 31, 2021, total unrecognized compensation expense associated with RSUs expected to vest was approximately $245.5 million, which is expected to be recognized over a weighted-average period of 3.0 years. Common Stock Repurchase Program In November 2009, we announced a stock repurchase program ("program"), providing for the repurchase of our Class A common stock. The following table summarizes the initial amount of authorized repurchases as well as additional repurchases approved by our Board of Directors as of December 31, 2021 (in thousands):
Stock repurchases under the program may be made through open market transactions, negotiated purchases, or otherwise, at times and in amounts that we consider appropriate. The timing of repurchases and the number of shares repurchased depend upon a variety of factors, including price, regulatory requirements, the rate of dilution from our equity compensation plans, and other market conditions. The program does not have a specified expiration date, and can be limited, suspended, or terminated at our discretion at any time without prior notice. Shares repurchased under the program will be returned to the status of authorized but unissued shares of Class A common stock. As of December 31, 2021, the remaining authorization to purchase additional shares was approximately $255.8 million. The following table provides information regarding share repurchase activity under the program during fiscal 2022:
(1)Cost of share repurchases includes the price paid per share, and excludes commission costs. (2)Average price paid per share excludes commission costs. Dividend Program The following table summarizes dividends declared under the program during fiscal 2022:
(1)The dividend payment amount is estimated based on the number of shares of our Class A and Class B common stock that we estimate will be outstanding as of the Record Date.
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Loss Other comprehensive income/loss consists of three components: unrealized gains or losses on our AFS marketable investment securities, gains and losses on derivatives in cash flow hedge relationships not yet recognized in earnings, and the gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies. Until realized and reported as a component of net income, these comprehensive income items accumulate and are included within accumulated other comprehensive loss, a subsection within stockholders’ equity in our condensed consolidated balance sheets. Unrealized gains and losses on our investment securities are reclassified from AOCI into earnings when realized upon sale and are determined based on specific identification of securities sold. Unrealized gains and losses on our cash flow hedges are reclassified from AOCI into earnings when the hedged operating expenses are recognized which is also when the gains and losses are realized. The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of AOCI into earnings affect our condensed consolidated statements of operations (in thousands):
(1)Realized gains or losses, if any, from the sale of our AFS investment securities or from foreign currency translation adjustments are included within other income/expense, net in our condensed consolidated statements of operations. Realized gains or losses on foreign currency contracts designated as cash flow hedges are included in operating expenses in the condensed consolidated statements of operations. (2)The income tax benefit or expense is included within provision for income taxes in our condensed consolidated statements of operations.
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Earnings Per Share |
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Earnings Per Share | . Earnings Per Share Basic EPS is computed by dividing net income attributable to Dolby Laboratories, Inc. by the number of weighted-average shares of Class A and Class B common stock outstanding during the period. Through application of the treasury stock method, diluted EPS is computed in the same manner, except that the number of weighted-average shares outstanding is increased by the number of potentially dilutive shares from employee incentive plans during the period. Basic and diluted EPS are computed independently for each fiscal quarter and year-to-date period, which involves the use of different weighted-average share count figures relating to quarterly and annual periods. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of all four quarter-to-date EPS figures may not equal year-to-date EPS. Potentially dilutive shares represent the hypothetical number of incremental shares issuable under the assumed exercise of outstanding stock options (both vested and non-vested) and vesting of outstanding RSUs. The calculation of dilutive shares outstanding excludes securities that would have an antidilutive effect on EPS. The following table sets forth the computation of basic and diluted EPS attributable to Dolby Laboratories, Inc. (in thousands, except per share amounts):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax expense, deferred tax assets and liabilities, and unrecognized tax benefits reflect management's best assessment of estimated current and future liabilities. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. Unrecognized Tax Benefits As of December 31, 2021, the total amount of gross unrecognized tax benefits was $68.3 million, of which $44.2 million, if recognized, would reduce our effective tax rate. As of September 24, 2021, the total amount of gross unrecognized tax benefits was $66.1 million, of which $43.6 million, if recognized, would reduce our effective tax rate. The first quarter fiscal 2022 increase was primarily due to current year reserves for transfer pricing and interest accruals. Our liability for unrecognized tax benefits is classified within other non-current liabilities in our condensed consolidated balance sheets. Effective Tax Rate Each period, the combination of multiple different factors can impact our effective tax rate. These factors include both recurring items such as tax rates and the relative amount of income earned in foreign jurisdictions, as well as discrete items that may occur in, but are not necessarily consistent between periods. Our effective tax rate in the first quarter of fiscal 2022 was 12.5% or a tax expense of $11.4 million and our effective tax rate in the first quarter of fiscal 2021 was 14.5% or a tax expense of $24.3 million. The decrease in our effective tax rate was primarily due to the mix of earnings favoring jurisdictions with lower tax rates and tax benefits related to settlement of stock-based awards.
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Restructuring |
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Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring Restructuring charges recorded in our condensed consolidated statements of operations represent costs associated with separate individual restructuring plans implemented in various fiscal periods. Costs arising from these actions, including fluctuations in related balances between fiscal periods, are based on the nature of activities under the various plans. Fiscal 2021 Restructuring Events. In fiscal 2021, we implemented a plan to reduce certain activities, such as exiting our conferencing hardware business, in order to focus our efforts on higher priority investment areas, and reduce the cost structure of our manufacturing operations. As a result, we recorded $9.5 million in restructuring costs in fiscal 2021. The table presented below summarizes the changes in our restructuring accruals (in thousands):
The activities during fiscal 2021 also reflect the impact of our early exit of a leased facility and related strategic reorganization of our marketing function as a part of the fiscal 2019 restructuring plan. Accruals for restructuring charges incurred for the restructuring plan described above are included within accrued liabilities in our condensed consolidated balance sheets, while restructuring charges are included within restructuring charges in our condensed consolidated statements of operations.
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Legal Matters |
3 Months Ended |
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Dec. 31, 2021 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Legal Matters | . Legal Matters We are involved in various legal proceedings that occasionally arise in the normal course of business. These can include claims of alleged infringement of IP rights, commercial, employment, and other matters. In our opinion, resolution of these proceedings is not expected to have a material adverse impact on our operating results or financial condition. Given the unpredictable nature of legal proceedings, it is possible that an unfavorable resolution of one or more such proceedings could materially affect our future operating results or financial condition in a particular period, including as a result of required changes to our licensing terms, monetary penalties, and other potential consequences. However, based on the information known by us as of the date of this filing and the rules and regulations applicable to the preparation of our condensed consolidated financial statements, any such amounts are either immaterial, or it is not feasible to provide an estimate of any such potential losses. |
Commitments And Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments And Contingencies | . Commitments and Contingencies In the ordinary course of business, we enter into contractual agreements with third parties that include non-cancelable payment obligations, for which we are liable in future periods. These arrangements can include terms binding us to minimum payments and/or penalties if we terminate the agreement for any reason other than an event of default as described by the agreement. The following table presents a summary of our contractual obligations and commitments as of December 31, 2021 (in thousands):
Naming Rights. We have entered into agreements for naming rights of certain facilities, most significantly for naming rights and related benefits with respect to the Dolby Theatre in Hollywood, California, the location of the Academy Awards®. The term of this agreement is 20 years, over which we will make payments on a semi-annual basis until fiscal 2032. Our ongoing annual payment obligations are conditioned in part on the Academy Awards being held and broadcast from the Dolby Theatre. Our payment obligations may be suspended or reduced in certain circumstances, including the protracted closure of the Dolby Theatre. Purchase Obligations. Purchase obligations primarily consist of our commitments made under agreements to purchase goods and services related to Dolby Cinema and for purposes that include information technology and telecommunications, marketing and professional services, and manufacturing and other R&D activities. Donation Commitments. Our donation commitments relate to non-cancelable obligations that consist of maintenance services and installation of imaging and audio products in exchange for various marketing, branding, and publicity benefits. These donation agreements either transfer title of our audio and imaging products to the donee or offer use of the products free of charge for a specified period of time via a leasing arrangement. The recipients of these donations participate in or promote the cinema and entertainment industry and our commitments vary in length, lasting up to 15 years. Indemnification Clauses. On a limited basis, our contractual agreements contain a clause under which we agree to provide indemnification to the counterparty, most commonly to licensees in connection with licensing arrangements that include our IP. We have also entered into indemnification agreements with our officers, directors, and certain employees, and our certificate of incorporation and bylaws contain similar indemnification obligations. Additionally, and although not a contractual requirement, we have at times elected to defend our licensees from third party IP infringement claims. Since the terms and conditions of our contractual indemnification clauses do not explicitly specify our obligations, we are unable to reasonably estimate the maximum potential exposure for which we could be liable.
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Subsequent Event |
3 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Acquisition of Millicast. On January 31, 2022, we acquired all outstanding interests of Millicast, Inc. ("Millicast"), a privately held company, for approximately $39 million in cash. Millicast is a WebRTC-based real-time content delivery network for large-scale live streaming applications, with sub-second latency. Following the acquisition, Millicast is expected to enable developers to take the interactive events they build with Dolby.io, and stream them from the presenter to large audiences. We are in the process of allocating the purchase price to the acquired assets and liabilities based upon their estimated fair values as of the closing date of the acquisition. Share Repurchase Program. On February 3, 2022, we announced that our Board of Directors approved increasing the size of our stock repurchase program by $250 million, bringing the amount available for future repurchases of our Class A Common Stock to approximately $506 million. Stock repurchases under this program may be made through open market transactions, negotiated purchases, or otherwise, at times and in amounts that we consider appropriate. The timing of repurchases and the number of shares repurchased depend upon a variety of factors, including price, regulatory requirements, the rate of dilution from our equity compensation plans, and other market conditions. The program does not have a specified expiration date, and can be limited, suspended or terminated at our discretion at any time without prior notice. Shares repurchased under the program will be returned to the status of authorized but unissued shares of Class A common stock.
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Summary Of Significant Accounting Policies (Policy) |
3 Months Ended |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles Of Consolidation | Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of Dolby Laboratories, Inc. and our wholly owned subsidiaries. In addition, we have consolidated the financial results of jointly owned affiliated companies in which our principal stockholder has a controlling interest. We report these controlling interests as a separate line in our condensed consolidated statements of operations as net income attributable to controlling interest and in our condensed consolidated balance sheets as a controlling interest. We eliminate all intercompany accounts and transactions upon consolidation.
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Operating Segments | Operating Segments Since we operate as a single reportable segment, all required financial segment information is included in our unaudited interim condensed consolidated financial statements. This reflects the fact that our CODM, our Chief Executive Officer, evaluates our financial information and resources, and assesses the performance of these resources on a consolidated basis.
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Use of Estimates | Use of Estimates The preparation of our financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported and disclosed in our unaudited interim condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include estimated shipments by our licensees for which we are owed a sales-based royalty. These estimates involve the use of historical data and judgment for several key attributes including industry estimates of expected shipments, the percentage of markets using our technologies, and average sale prices. Our estimates of royalty-based revenue also take into consideration the macroeconomic effect of global events, such as the coronavirus pandemic ("COVID-19") or other natural disasters which may impact our licensees' supply chain activities as well as demand for shipments. Additional significant items subject to such estimates and assumptions include ESPs for performance obligations within revenue arrangements; allowances for credit losses for accounts receivable; carrying values of inventories and certain PP&E, goodwill and intangible assets; fair values of investments; accrued liabilities including liabilities for unrecognized tax benefits, deferred income tax assets and liabilities, and stock-based compensation. Actual results could differ from our estimates.
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Fiscal Year | Fiscal Year Our fiscal year is a 52 or 53 week period ending on the last Friday in September. The fiscal periods presented herein include the 14 week period ended December 31, 2021 and the 13 week period ended December 25, 2020. Our fiscal year ending September 30, 2022 (fiscal 2022) consists of 53 weeks, and our fiscal year ended September 24, 2021 (fiscal 2021) consisted of 52 weeks.
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Recently Issued Accounting Policies | Recently Issued Accounting Standards Adopted Standards Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which modifies and eliminates certain exceptions to the general principles of ASC 740, Income Taxes. We adopted this standard in the first quarter of fiscal 2022, and it did not have a material impact on our condensed consolidated financial statements. Standards Not Yet Adopted Business Combinations. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by an acquirer in accordance with ASC 606, Revenue from Contracts with Customers. Currently, we recognize acquired contract assets and contract liabilities at fair value as of the acquisition date, in accordance with ASC 805. This standard will be effective for Dolby beginning September 30, 2023 on a prospective basis, but early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.
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Revenue Recognition (Tables) |
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Disaggregation of Revenue | The following table presents a summary of the composition of our revenue for all periods presented (in thousands, except percentage amounts):
The following table presents the composition of our licensing revenue for all periods presented (in thousands, except percentage amounts):
We license our technologies in approximately 60 countries, and our licensees distribute products that incorporate our technologies throughout the world. We generate the majority of our revenue from outside the U.S. Geographic data for our licensing revenue is based on the location of our licensees’ headquarters, products revenue is based on the destination to which we ship our products, and services revenue is based on the location where services are performed. The following table presents the composition of our revenue by geographic location for all periods presented (in thousands, except percentage amounts):
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Contract with Customer, Asset and Liability | The following table presents a summary of the balances to which contract assets and liabilities related to revenue are recorded for all periods presented (in thousands, except percentage amounts):
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Composition Of Certain Financial Statement Captions (Tables) |
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Schedule Of Accounts Receivable | Accounts Receivable and Contract Assets
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Schedule Of Allowance For Credit Losses |
Allowance for credit losses includes the provision for estimated credit losses on our sales-type leases of $0.5 million as of December 31, 2021. The allowance for credit losses on these leases as of September 24, 2021 was not material.
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Schedule Of Inventories | Inventories
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Schedule Of Prepaid Expenses And Other Current Assets | Prepaid Expenses And Other Current Assets
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Schedule Of Accrued Liabilities | Accrued Liabilities
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Schedule Of Other Non-Current Liabilities | Other Non-Current Liabilities
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Investments & Fair Value Measurements (Tables) |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Assets and Liabilities Carried At Fair Value | Our cash and investment portfolio consisted of the following (in thousands):
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Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The following table presents the gross unrealized losses and fair value for those AFS securities that were in an unrealized loss position for less than twelve months as of December 31, 2021 and September 24, 2021 (in thousands):
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Debt Securities, Available-for-sale | The following table summarizes the amortized cost and estimated fair value of the AFS securities within our investment portfolio based on stated maturities as of December 31, 2021 and September 24, 2021, which are recorded within cash equivalents and both short and long-term investments in our condensed consolidated balance sheets (in thousands):
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Property, Plant and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | PP&E are recorded at cost, with depreciation expense included in cost of licensing, cost of products and services, R&D, S&M, and G&A expenses in our condensed consolidated statements of operations. As of December 31, 2021 and September 24, 2021, PP&E consisted of the following (in thousands):
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Cost Components, Supplemental Cash Flow Information and Supplemental Balance Sheet Information Schedules | The components of lease expense were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows:
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Maturities of Lessee Lease Liabilities after Adoption of 842 Schedule | he following table presents the maturity analysis of lease liabilities (in thousands):
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Maturities of Lessor Operating Lease Payments Schedule | The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
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Maturities of Lessor Sales-Type Lease Payments Schedule | The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table outlines changes to the carrying amount of goodwill (in thousands):
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Schedule of Finite-Lived Intangible Assets | Intangible assets subject to amortization consisted of the following (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2021, expected amortization expense of our intangible assets in future fiscal periods was as follows (in thousands):
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Stockholders' Equity And Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity And Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Stock Options Issued To Officers, Directors, And Employees Under 2000 Stock Incentive Plan And 2005 Stock Plan | The following table summarizes information about PSOs granted to our executive officers that have vested:
(1)Aggregate shares exercisable at vest date does not include any shares that were cancelled before the vest date after they were granted. The following table summarizes information about stock options issued under our 2020 Stock Plan:
(1)Aggregate intrinsic value is based on the closing stock price of our Class A common stock on December 31, 2021 of $95.22 and excludes the impact of options that were not in-the-money.
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Summary Of Restricted Stock Units Issued To Officers, Directors And Employees Under 2005 Stock Incentive Plan | The following table summarizes information about RSUs issued under our 2020 Stock Plan:
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Schedule Of Fair Value Of Stock-Based Awards Estimated Using Weighted-Average Assumptions | The weighted-average assumptions used in the determination of the fair value of our stock options were as follows:
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Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following two tables separately present stock-based compensation expense both by award type and classification in our condensed consolidated statements of operations (in thousands): Expense - By Award Type
Expense - By Income Statement Line Item Classification
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Schedule of Stock Repurchase Authorizations | The following table summarizes the initial amount of authorized repurchases as well as additional repurchases approved by our Board of Directors as of December 31, 2021 (in thousands):
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Schedule of Stock Repurchase Activity | The following table provides information regarding share repurchase activity under the program during fiscal 2022:
(1)Cost of share repurchases includes the price paid per share, and excludes commission costs. (2)Average price paid per share excludes commission costs.
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Dividends Declared | The following table summarizes dividends declared under the program during fiscal 2022:
(1)The dividend payment amount is estimated based on the number of shares of our Class A and Class B common stock that we estimate will be outstanding as of the Record Date.
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Accumulated Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of AOCI into earnings affect our condensed consolidated statements of operations (in thousands):
(1)Realized gains or losses, if any, from the sale of our AFS investment securities or from foreign currency translation adjustments are included within other income/expense, net in our condensed consolidated statements of operations. Realized gains or losses on foreign currency contracts designated as cash flow hedges are included in operating expenses in the condensed consolidated statements of operations. (2)The income tax benefit or expense is included within provision for income taxes in our condensed consolidated statements of operations.
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Per Share Data (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted EPS attributable to Dolby Laboratories, Inc. (in thousands, except per share amounts):
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The table presented below summarizes the changes in our restructuring accruals (in thousands):
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Commitments And Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Contractual Obligations And Commitments | The following table presents a summary of our contractual obligations and commitments as of December 31, 2021 (in thousands):
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Basis Of Presentation (Details) |
3 Months Ended |
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Dec. 31, 2021
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Operating Segments | 1 |
Revenue Recognition Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Revenue adjustment | $ 6.0 |
Revenue recognized | $ 7.1 |
Revenue Recognition - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Sep. 24, 2021 |
|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 241,449 | $ 232,609 |
Contract assets, net | 226,809 | 182,316 |
Contract liabilities | 21,426 | 18,473 |
Non-current contract liabilities | 24,117 | $ 23,713 |
Change ($) | ||
Accounts receivable, net | 8,840 | |
Contract assets, net | 44,493 | |
Contract liabilities - current | 2,953 | |
Contract liabilities - non-current | $ 404 | |
Change (%) | ||
Accounts receivable, net | 4.00% | |
Contract assets, net | 24.00% | |
Contract liabilities - current | 16.00% | |
Contract liabilities - non-current | 2.00% |
Composition Of Certain Financial Statement Captions (Schedule Of Accounts Receivable) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Abstract] | ||
Trade accounts receivable | $ 137,985 | $ 160,112 |
Accounts receivable related to patent administration program | 113,364 | 81,241 |
Contract assets | 226,953 | 182,524 |
Accounts receivable, gross | 478,302 | 423,877 |
Less: allowance for doubtful accounts | (10,044) | (8,952) |
Accounts receivable, net | 468,258 | 414,925 |
Unbilled Receivables, Current | $ 105,100 | $ 97,500 |
Composition Of Certain Financial Statement Captions (Schedule Of Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2021 |
Sep. 24, 2021 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Fiscal Year | $ 8,952 | $ 15,908 |
Charged to Operations | 1,559 | (2,889) |
Deductions | 11 | (4,067) |
Balance at End of Fiscal Year | $ 10,522 | $ 8,952 |
Composition Of Certain Financial Statement Captions (Schedule Of Inventories) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Abstract] | ||
Raw materials | $ 4,571 | $ 2,792 |
Work in process | 3,761 | 3,461 |
Finished goods | 4,812 | 4,712 |
Inventories | $ 13,144 | $ 10,965 |
Composition Of Certain Financial Statement Captions (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Line Items] | ||
Raw materials | $ 4,571 | $ 2,792 |
Sales-type lease allowance for credit loss | (500) | |
Other Noncurrent Assets [Member] | ||
Composition Of Certain Financial Statement Captions [Line Items] | ||
Raw materials | $ 1,600 | $ 1,900 |
Composition Of Certain Financial Statement Captions (Schedule Of Prepaid Expenses And Other Current Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Abstract] | ||
Prepaid assets | $ 35,615 | $ 29,964 |
Other current assets | 33,078 | 32,773 |
Prepaid expenses and other current assets | $ 68,693 | $ 62,737 |
Composition Of Certain Financial Statement Captions (Schedule Of Accrued Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Abstract] | ||
Amounts payable to patent administration program partners | $ 77,273 | $ 72,847 |
Accrued compensation and benefits | 68,160 | 107,322 |
Accrued professional fees | 13,405 | 11,737 |
Unpaid property, plant, and equipment additions | 18,257 | 17,839 |
Accrued customer refunds | 9,677 | 14,151 |
Accrued market development funds | 12,299 | 7,777 |
Other accrued liabilities | 26,776 | 31,055 |
Total accrued liabilities | $ 225,847 | $ 262,728 |
Composition Of Certain Financial Statement Captions (Schedule Of Other Non-Current Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Composition Of Certain Financial Statement Captions [Abstract] | ||
Supplemental retirement plan obligations | $ 4,783 | $ 4,877 |
Non-current tax liabilities | 86,161 | 85,063 |
Other liabilities | 11,434 | 15,370 |
Other non-current liabilities | $ 102,378 | $ 105,310 |
Leases (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
Sep. 24, 2021 |
|
Lessor, Lease, Description [Line Items] | |||
Lesse lease term | 10 years | ||
Lessee lease renewal term | 5 years | ||
Lessee lease termination period | 1 year | ||
Variable operating lease income | $ 8.1 | $ (0.5) | |
Fixed operating lease income | 0.9 | $ 1.1 | |
Unguaranteed residual value of sales-type leases | $ 0.8 | $ 0.8 | |
Minimum [Member] | |||
Lessor, Lease, Description [Line Items] | |||
Lessor lease term | 4 years | ||
Lessor lease renewal term | 1 year | ||
Maximum [Member] | |||
Lessor, Lease, Description [Line Items] | |||
Lessor lease term | 10 years | ||
Lessor lease renewal term | 5 years |
Leases (Lease Cost Components) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Leases [Abstract] | ||
Operating lease cost | $ 4,639 | $ 4,794 |
Variable lease cost | 356 | 91 |
Total lease cost | $ 4,995 | $ 4,885 |
Leases (Supplemental Cash Flow Information Schedule) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
REMOVE | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 4,694 | $ 4,921 |
REMOVE | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 122 | $ 836 |
Leases (Supplemental Balance Sheet Information Schedule) (Details) |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Operating Leases | ||
Weighted-average remaining lease term | 5 years 8 months 12 days | 5 years 9 months 18 days |
Weighted-average discount rate | 3.10% | 3.10% |
Leases (Maturities of Lessee Lease Liabilities Schedule) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Operating Leases | |
Remainder of Fiscal 2022 | $ 12,772 |
Fiscal 2023 | 15,859 |
Fiscal 2024 | 13,439 |
Fiscal 2025 | 9,506 |
Fiscal 2026 | 5,974 |
Thereafter | 17,043 |
Total undiscounted lease payments | 74,593 |
Less: imputed interest | (6,666) |
Total lease liabilities | $ 67,927 |
Leases (Maturities of Lessor Lease Payments Schedule) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
Remainder of Fiscal 2022 | $ 85 |
Fiscal 2023 | 783 |
Fiscal 2024 | 803 |
Fiscal 2025 | 824 |
Fiscal 2026 | 731 |
Thereafter | 0 |
Total undiscounted cash flows | 3,226 |
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract] | |
Remainder of Fiscal 2022 | 1,595 |
Fiscal 2023 | 1,595 |
Fiscal 2024 | 795 |
Fiscal 2025 | 395 |
Fiscal 2026 | 395 |
Thereafter | 0 |
Total undiscounted cash flows | 4,775 |
Less: present value of lease payments (recognized as lease receivables) | (3,883) |
Difference | $ 892 |
Goodwill and Intangible Assets Goodwill Rollforward (Details) $ in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at September 24, 2021 | $ 340,694 |
Translation adjustments | (797) |
Balance at December 31, 2021 | $ 339,897 |
Goodwill and Intangible Assets Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
Sep. 24, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 442,975 | $ 432,074 | |
Accumulated Amortization | (317,171) | (309,184) | |
Total | 125,804 | 122,890 | |
Purchases of intangible assets | $ 11,400 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 16 years | ||
Amortization of Intangible Assets | $ 8,000 | $ 7,300 | |
Acquired Patents And Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 354,197 | 343,280 | |
Accumulated Amortization | (240,438) | (233,789) | |
Total | 113,759 | 109,491 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 65,822 | 65,822 | |
Accumulated Amortization | (53,927) | (52,730) | |
Total | 11,895 | 13,092 | |
Other Intangibles [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 22,956 | 22,972 | |
Accumulated Amortization | (22,806) | (22,665) | |
Total | $ 150 | $ 307 |
Goodwill and Intangible Assets Future Amortization Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Sep. 24, 2021 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 21,146 | |
2018 | 24,910 | |
2019 | 22,838 | |
2020 | 7,768 | |
2021 | 6,877 | |
Thereafter | 42,265 | |
Total | $ 125,804 | $ 122,890 |
Goodwill and Intangible Assets Intangible Assets, Additions (Details) |
3 Months Ended |
---|---|
Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 16 years |
Stockholders' Equity And Stock-Based Compensation (Summary Of Restricted Stock Units Issued To Officers, Directors, And Employees Under 2005 Stock Incentive Plan) (Details) shares in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2021
$ / shares
shares
| |
Shares | |
Shares, Non-vested at beginning of period | shares | 3,335 |
Shares, Granted | shares | 1,368 |
Shares, Vested | shares | (999) |
Shares, Forfeitures | shares | (82) |
Shares, Non-vested at end of period | shares | 3,622 |
Weighted-Average Grant Date Fair Value | |
Weighted Average Fair Value, Non-vested at beginning of period (in dollars per share) | $ / shares | $ 77.46 |
Weighted Average Fair Value, Granted (in dollars per share) | $ / shares | 89.64 |
Weighted Average Fair Value, Vested (in dollars per share) | $ / shares | 71.31 |
Weighted Average Fair Value, Forfeitures (in dollars per share) | $ / shares | 77.64 |
Weighted Average Fair Value, Non-vested at end of period (in dollars per share) | $ / shares | $ 83.75 |
Stockholders' Equity And Stock-Based Compensation (Schedule Of Fair Value Of Stock-Based Awards Estimated Using Weighted-Average Assumptions) (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Stockholders' Equity And Stock-Based Compensation [Abstract] | ||
Expected life (in years) | 4 years 9 months 10 days | 4 years 10 months 17 days |
Risk-free interest rate | 1.20% | 0.40% |
Expected stock price volatility | 28.60% | 28.70% |
Dividend yield | 1.10% | 1.10% |
Stockholders' Equity And Stock-Based Compensation (Stock Repurchase Authorizations) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Jul. 29, 2021 |
Jul. 31, 2019 |
Jul. 25, 2018 |
Jan. 25, 2017 |
Oct. 31, 2014 |
Feb. 29, 2012 |
Jul. 31, 2011 |
Jul. 31, 2010 |
Nov. 30, 2009 |
---|---|---|---|---|---|---|---|---|---|---|
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Authorization Amount | $ 2,350,000 | $ 250,000 | ||||||||
Additional Stock Approved [Member] | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Authorization Amount | $ 350,000 | $ 350,000 | $ 350,000 | $ 200,000 | $ 200,000 | $ 100,000 | $ 250,000 | $ 300,000 |
Stockholders' Equity And Stock-Based Compensation (Stock Repurchase) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares repurchased (in shares) | 408,508 | |
Payments for Repurchase of Common Stock | $ 35,573 | $ 39,985 |
Repurchase of common stock | $ 35,573 | |
Stock Repurchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares repurchased (in shares) | 408,508 | |
Average Price Paid per Share (in dollars per share) | $ 87.08 |
Stockholders' Equity and Stock-Based Compensation - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Feb. 23, 2022 |
Feb. 03, 2022 |
Dec. 31, 2021 |
Dec. 25, 2020 |
|
Dividends Payable [Line Items] | ||||
Cash dividend declared per common share (in dollars per share) | $ 0.25 | $ 0.22 | ||
Subsequent Event | ||||
Dividends Payable [Line Items] | ||||
Cash dividend declared per common share (in dollars per share) | $ 0.25 | |||
Dividend Payment | $ 25.4 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
Sep. 24, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits, gross | $ 68,300 | $ 66,100 | |
Unrecognized tax benefits if recognized, would affect our effective tax rate | $ 44,200 | $ 43,600 | |
Effective tax rate (as a percent) | 12.50% | 14.50% | |
Provision (benefit) for income taxes | $ (11,432) | $ (24,272) | |
Federal tax rate | 21.00% |
Restructuring (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2021 |
Dec. 25, 2020 |
Sep. 24, 2021 |
|
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | $ 167 | $ 0 | $ 0 |
Restructuring charges/(credits) | (95) | 10,023 | 10,240 |
Cash payments and adjustments | 91 | 10,073 | |
Restructuring reserve, ending balance | 163 | 167 | |
Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 163 | 0 | 0 |
Restructuring charges/(credits) | 0 | 9,522 | |
Cash payments and adjustments | 0 | 9,359 | |
Restructuring reserve, ending balance | 163 | 163 | |
Leased facility exit costs and other costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 4 | $ 0 | 0 |
Restructuring charges/(credits) | (95) | 718 | |
Cash payments and adjustments | 91 | 714 | |
Restructuring reserve, ending balance | $ 0 | $ 4 |
Commitments And Contingencies (Narrative) (Details) |
3 Months Ended |
---|---|
Dec. 31, 2021 | |
Naming Rights | |
Other Commitments [Line Items] | |
Term of agreement | 20 years |
Donation Commitments | |
Other Commitments [Line Items] | |
Term of agreement | 15 years |
Subsequent Event (Details) - USD ($) |
Jan. 31, 2022 |
Feb. 03, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 255,800,000 | ||
Subsequent Event | Class A Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Increase in stock repurchase program | $ 250,000,000 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 506,000,000 | ||
Subsequent Event | Millicast, Inc. | |||
Subsequent Event [Line Items] | |||
Cash payment to sellers | $ 39,000,000 |
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