Dolby reported first-quarter non-GAAP earnings per share of $1.06, topping the consensus estimate of $0.99 by 7%. Revenue of $346.7 million surpassed the $341.3 million forecast by 1.6%, although both metrics declined from $1.14 per share and $357 million in the year-ago quarter. Licensing revenue weakness was the primary drag on total sales, and the shares fell roughly 3% in after-hours trading following the release.

The company’s balance sheet remains robust, with a debt-to-equity ratio of just 0.015 and a current ratio of 3.17, underscoring minimal leverage and ample short-term liquidity. During the quarter Dolby repurchased approximately one million shares for $70 million and declared a cash dividend of $0.36 per share payable in mid-February, leaving roughly $207 million of repurchase authorization available.

Dolby provided second-quarter revenue guidance of $375 million to $405 million and licensing revenue of $350 million to $380 million, with GAAP gross margins expected near 90% and non-GAAP margins around 91%. GAAP operating expenses are projected at $230 million to $240 million, non-GAAP at $195 million to $205 million, and diluted EPS between $0.94 and $1.09 on a GAAP basis and $1.29 to $1.44 non-GAAP. For fiscal 2026, management anticipates total revenue of $1.40 billion to $1.45 billion, licensing revenue of $1.295 billion to $1.345 billion, GAAP operating margins near 21%, non-GAAP margins around 34%, and full-year EPS of $2.71 to $2.86 GAAP and $4.30 to $4.45 non-GAAP.