Dolby at William Blair Conference: Strategic Growth and Challenges

On Wednesday, 04 June 2025, Dolby Laboratories (NYSE:DLB) presented at the 45th Annual William Blair Growth Stock Conference. CEO Kevin Yeaman discussed the company’s strategic evolution and growth prospects, highlighting the positive momentum from Dolby Atmos and Dolby Vision, while acknowledging challenges like potential tariff impacts on device shipments.

Key Takeaways

• Dolby Atmos and Dolby Vision are experiencing a compound annual growth rate of about 20%.
• The foundational audio technologies segment, vital to Dolby’s revenue, is stabilizing.
• Dolby’s new SaaS model, OptiView, targets real-time interactive experiences, notably in sports and iGaming.
• Expansion plans include 40 new Dolby Cinema screens in the US and international growth in South Korea and India.
• Tariff impacts pose slight headwinds, but strategic mitigations are in place.

Financial Results

• Revenue Composition: Dolby divides its revenue between foundational audio technologies and growth products like Dolby Atmos and Dolby Vision.

- Foundational audio technologies constituted 60% of licensing revenue last year, with mid-term growth projected in the low single digits.

- Dolby Atmos, Dolby Vision, and imaging patents have grown from 15% to 40% of licensing revenue over four years.

• Growth Projections: Dolby anticipates growth rates of 15% to 25% annually for Dolby Atmos, Dolby Vision, and imaging patents.
• Operating Margins: Increased operating margins are expected, building on last year’s improvements.

Operational Updates

• Ecosystem Focus: Dolby caters to content creators, distributors, and device manufacturers.
• OptiView (Dolby IO): This SaaS model charges based on content consumption, targeting sports, sports betting, and iGaming with ultra-low latency streaming.
• Dolby Cinema Expansion: Plans include 40 new screens in the US, with expansion into South Korea and India.
• Automotive Market: Automotive is identified as one of Dolby’s fastest-growing sectors.

Future Outlook

• Growth Strategy: Emphasizes stabilizing the foundational business and expanding Dolby Atmos, Dolby Vision, and imaging patents.
• Tariff Concerns: While tariffs pose slight headwinds, Dolby is mitigating impacts through strategic measures like TV manufacturing in Mexico.
• End Markets: Broadcast and mobile remain the largest markets, with growing interest in automotive, gaming, and premium cinema experiences.
• Adoption and Pricing: Aiming for high adoption rates with fair pricing strategies.

Q&A Highlights

• Pricing Strategy: Focuses on achieving high adoption rates through fair pricing.
• Dolby Cinema Expansion: New screens planned in the US, South Korea, and India highlight the growing interest in premium movie experiences.
• Premium Experiences: Premium movie-going experiences are gaining a larger share of the box office.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Ralph Schackart, Internet Analyst, William Blair: All right. Good morning. Why don’t we go ahead and get started. I’m Ralph Schackart, Internet Analyst here at William Blair. Thanks again for attending our Annual Growth Stock Conference.

Today, we’re really excited to have Kevin back from Dolby to give you an overview on the business. Just a quick overview of the company because I think it’ll help level set. I’ve covered the company since the IPO which is a long time ago. And through the history of Dolby, every time there’s been a product cycle, you’ve seen the business sort of grow on top of each other. So if you go way back to when there was analog surround to digital surround to mobile to now what we would call streaming and then whatever is beyond streaming, Dolby is the business has sort of grown and become larger over time.

And I think at this point if you look over the last four years, the business has been relatively flat. But I think what we’ll focus on today is sort of coming out of that flat period. The business is starting to grow again. They’ll add about 200 basis points of margin expansion as a result of the business growing. So I think that’ll be sort of the focus here today.

We’ll do a fireside format instead of a presentation and then definitely some questions at the end time for questions at the end. And then I think the breakouts and and Sullivan, if I’m not mistaken. And I have to tell you to check our website for disclosures so my compliance officer doesn’t get better. With that, we’ll go ahead and kick it off. Maybe Dolby, sort of an overview, Kevin, to kick things off.

You’ve been here for a long time. Previous role as a CFO have transitioned and been in the CEO role for a while. Maybe kind of walk us through the evolution of Dolby as you see it through your eyes, and kind of where we are today.

Kevin Yeaman, CEO, Dolby: Yeah. Thanks, Ralph, and thanks for thanks for having me. Thanks everybody for coming to learn a little more about Dolby. Yeah. I’ve I’ve been I joined right after the IPO, so so along with you about twenty years.

And hopefully, all have had some experience with Dolby. I think one of the one of the great things, about working at Dolby is that you often have people share their first experience with Dolby, and that could have been depending on the generation, that could have been the button on the cassette player that eliminated noise for music. It could have been the first time that they experienced surround sound in, the theater. Oftentimes, was Star Wars for is what people remember. And, of course, what we’ve been doing is working through these transitions and through the changing times to make sure that we still have those moments, And I’m and and we get those moments.

We get people who are excited about the first time they experienced Dolby Cinema and Dolby Vision and Dolby Atmos. Increasingly, it’s about the first time they’re experiencing Dolby Atmos in the car, which is one of our our newest initiatives. And that’s what, you know, ultimately, what, you know, everybody in our company is focused on is, providing the technologies required for these eco these ecosystems to deliver high quality entertainment, often producing these spectacular moments that people remember forever. And while also meeting the efficiency needs of all the people that have to do all the work to produce that content, get it through the chain, you know, whether you’re in the you know, back in the broadcast center or in the in the in the in the mixing truck, that that’s what we that’s what we do at Dolby. And, yes, it’s been the company’s been around for sixty five years.

I’ve enjoyed twenty years of that journey, about fifteen as CEO. So obviously during that time we’ve seen a lot of different economic cycles and to Ralph’s point, we’ve seen a lot of technology transitions. Just since I’ve been at Dolby, analog to digital, DVD to streaming, standard def to high def to four k. Those are some of the technology transitions that were really critical to the work that we do. And each of those times, we’ve not only made those transitions, but we’ve also introduced new technologies which have enabled us to have, add more value, on the devices that we’re on and also expand into new ecosystems.

So we’ve gone from movies and TV to gaming to sports to music and more recently to user generated content. And I I think that’s the way we’ve been able to make those transitions is I think, first of all, we’re very clear on our role in the industry. We have a group of people that is passionate about focusing on the science and the engineering of sight and sound to bring to light these spectacular experiences and again to meet the quality and efficiency needs of these ecosystems that we serve, which is the second thing. I think it’s important to maybe just spend a moment on what I mean by ecosystems. For us, that means that while we earn revenue on a a royalty for each device that includes our technology depending on how much technology is in that device, the way we we earn that revenue is by serving the needs of the the artistic content creation community.

We’re providing them with the ability to expand their palette with our technologies. Audio video is their medium. We’re working with everybody in the distribution chain, content owners, streamers, broadcasters to make sure that that what what that creator intended can efficiently be delivered to the device. And then, of course, we’re working with the device manufacturer to meet their goals and objectives as it relates to kinda how they wanna bring this offering to consumers. And ultimately, it’s the consumer that then gets to enjoy this more compelling, more emotive experience, and that’s why over sixty five years, so many of the films, so much of the music, so many of the stories that people love and remember are in Dolby.

And that, you know, from Star Wars to Avatar, from the Grateful Dead to Taylor Swift, from the World Cup to the Super Bowl, from your Walkman to your home theater to your to DVDs to streaming, Dolby is a part of that.

Ralph Schackart, Internet Analyst, William Blair: Great. And then a few years ago, I think when Robert joined, you broke out the revenue from foundational to growth products, which I think has been helpful for investors. Maybe if you could sort of give an overview of what that means to investors and sort of give us a sense of the growth relative growth between the products.

Kevin Yeaman, CEO, Dolby: Yeah. Of course. So we we we now provide this breakout between foundational audio technologies and Dolby Atmos, Dolby Vision in our imaging patents, to give you a sense of how to relate it to the macroeconomic environment, which has been a pretty big, you know, feature in our thinking really since the onset of the the pandemic. So the foundational audio technologies include our our licensed we have patent pool technologies where we contribute patents along with other patent holders in accordance with standards that that are collaboratively established with the industry and that we innovate into. They meet needs around compression and content delivery, etcetera.

So that’s one of the the the technologies that’s included in foundational. And the other is our branded Dolby Audio Codecs. This is where we’re building these ecosystems, and, again, to meet the the the core needs of delivery for multichannel audio, which you might relate to as stereo or surround. And and what those two technologies have in common is that they have been around for for a little while, so they have the they have very significant attach rates across a very wide number of devices. The point of which as you think about Dolby’s growth is that what’s happening with the health of consumer device shipments overall is gonna be a pretty big factor in how what the growth rate will be for the foundational audio technologies.

Last year that was about 60% of our licensing revenue and we think that that going forward we think over the over the mid term it can grow in the low single digits and I’m sure we’ll talk more about that in a moment. Dolby Atmos, Dolby Vision, and and imaging patents, obviously health of consumer device shipments affects everything we do but these are technologies that are are well established yet still have a lot of room to grow on attach rate and we have been growing the attach rates of Dolby Atmos, Dolby Vision and the imaging patents. And so that category we’ve been able to grow over the last four years at a compound annual growth rate of about 20%. So, you know, four years ago, that made up 15% of the revenue. Today, it makes up 40% of that licensing revenue.

And, that’s how to think about the foundational versus Dolby Atmos, Dolby Vision imaging patents.

Ralph Schackart, Internet Analyst, William Blair: Great. Maybe just kinda drilling in on that. Maybe can you give an overview of again, some feedback on this. Mike? Thanks.

An overview of foundational. I think we covered that actually. Could we drill into a little bit more to Atmos and vision and the imaging patents and maybe what that means at the consumer level and then maybe what value that adds to your ecosystem as well?

Kevin Yeaman, CEO, Dolby: Yeah. So again, at the at the consumer level, if we’re doing our jobs, what you’re you’re just you’re just more immersed in the story and it’s a more emotive experience. If we take Dolby Atmos and Dolby Vision, the the the value, what really makes it special I think is that we are expanding the palette for the artist. So when we first conceive of something like Dolby Atmos and Dolby Vision, the first place we go is to the creative community. Each of those came to life via the movies and TV ecosystem.

So with Dolby Atmos, when we were first demoing that to directors, I’m always looking for, and and even more so the team that is doing all this work, is looking for, the artist a mow that moment where they realize they can they can express something that they weren’t able to express with the previous version of the technology. So as it relates to Dolby Atmos, I remember a couple of moments that I happened to be a part of. And one of them was there was a director who had shot a scene where it was a car chase scene and there was a crash and the car flipped off the screen sort of towards you and off off top off the top of the screen. And he got so excited because he didn’t wanna use that scene because he felt like he couldn’t keep people in the audio experience. But with Dolby Atmos, he believed he could keep people in the Dolby Atmos is a far more specialized experience.

So as a, if you were creating a movie, if you think of surround sound, which you’re all familiar with, your creative control is to direct which of five spots in the room you want the sounds to come from. If you’re in a cinema with 50 speakers, it’s just in grouped into groups of five and it’s coming from one of those directions. With Dolby Atmos, they are mixing the sound in a three d interface. It would kinda look like a gaming mixing to you because you can put up to a 28 objects at any one point in time in the room. And then Dolby, with our technology, will process that whether it’s 50 speakers in a cinema or two earbuds and and try to replicate that as faithfully as possible.

And so that’s why when he saw this car flipping off the screen, he said, oh, now I can keep that scene and I can keep the audience in that scene. With a similar moment with Dolby Vision where one director was we were halfway through a presentation and he just screamed in the middle of it. Oh, now I can use Knight as a character, which is I can’t say that creatively I necessarily understand, but it’s the kind of thing I love to hear because I know that they’re seeing that we’re helping them to better express, themselves. What Dolby Vision does is it provides for high dynamic range, much starker difference between the darks and the lights. You get true blacks.

You can allocate more between the blacks and the lights. So if there’s a scene where if if behind me there was a window and a skyline scene, it doesn’t get washed out. You can you can get the skin tone, but you can also preserve the detail of what’s going on in the background. And it also expands the range of color. So standard cinematic dynamic range was pre Dolby Vision was four to 8,000 to one.

Dolby Vision peaks out at over a million to one. So it’s just a completely different experience, and that’s why they get, excited about it. And so, that’s why people get it it starts with that creative passion because, the the the content owners and the distributors, of course, they want to it’s an important constituent to them is who’s gonna make the content. They want to support them in in in our in telling their stories in the best possible way. And then that, of course, creates the value proposition for device manufacturers who are looking to offer the best possible experiences and stay competitive.

And and, ultimately, it’s the consumer who hopefully has one or more of those moments where, oh gosh, I remember the first time I saw Dolby at Dolby Cinema.

Ralph Schackart, Internet Analyst, William Blair: You know, when I listened to Rocketman and the demo, I cried personally.

Kevin Yeaman, CEO, Dolby: Thank you for sharing. Thank you for sharing. Yeah. So yeah. I know.

Yeah. I I I know your joke, but we’ve had we’ve had a list artists who literally, when we introduced Dolby Atmos into music, our team, some of them agreed to to be, kinda filmed to give them their first react. And we had more than one who broke down in tears when they heard their favorite song in Dolby Atmos. It’s just a it’s such an immersive experience. Wasn’t wasn’t usually their song.

It was just their favorite song.

Ralph Schackart, Internet Analyst, William Blair: Yeah. Maybe pivoting to OptiView, which is a new term for what used to be called Dolby IO, which is a newer business model for you, is more of a SaaS model. Yeah. Maybe if you provide some perspective on, sort of your thoughts for that. Maybe an overview of the business first and how you think about the business going forward.

Kevin Yeaman, CEO, Dolby: Yeah. So, you know, the licensing model and the ecosystems we’ve built is such a great model with 98 gross margins. What one of the big difference between that and this software as a service model is that the software as a service model, we are charging based on consumption, consumption, based on the amount of concept content that is streamed and consumed. And in particular, we’re focused on the area of mainstream sports including sports betting and also iGaming because our value proposition is targeted at companies that are increasingly looking to introduce or enhance the real time interactive digital experiences to increase engagement with their audiences. So what Dolby does specifically is we have a video player that they can integrate into that experience.

We provide the capability to, live stream high quality audio video, in ultra low latency, which means we can do this in sub seconds. So on average, and I’m sure you’ve all experienced this, there’s a delay in streaming. It can be on average, I think it’s seven to eight seconds, but it could it could go up to twenty, twenty five, thirty seconds. We can do that in subsecond. Importantly, we can also ensure that everybody’s getting it at the same time.

And this is important because if we’re trying to engage with one another on one of these apps, if I see the touchdown twenty seconds before you see the touchdown, it’s not a very fun interactive experience. We’ve also introduced a technology which allows for real time ad insertion at that same rate, taking into consideration the various types of screen types and things that you might be watching on. So so we’re excited about this opportunity because, you know, first of all, I think sports is a part of our business across our whole business where there there is a lot of investment in improving the experience. And in particular, across the landscape, people are are really focused on how to really lean into these digital experiences. Everybody wants to increase engagement with their audiences.

And so we feel like we’re we’re hitting the market at a very good time with this with this offering.

Ralph Schackart, Internet Analyst, William Blair: We were in Europe with your team recently and we’re seeing some sporting bedding shops. Patty, I think the

Kevin Yeaman, CEO, Dolby: last Mhmm.

Ralph Schackart, Internet Analyst, William Blair: Maybe give some perspective why they would license your technology and sort of a practical use case of, like, when the bedding window would close and how your technology sort of optimize, that for their, for that customer.

Kevin Yeaman, CEO, Dolby: Yeah. In the sports betting use case, there’s a number of of reasons, to to want consistency of delivery and ultra low latency. I mean, first of all, a lot of the bedding comes in kinda late in the window. So by by streaming in ultra low latency, you’re keeping that window open for five, ten, fifteen seconds longer. Secondly, in something like Paddy Power where they are using us to stream in all their shops, it’s not just a single screen.

It’s like, you know, can be 50 screens with 50 different events, and sometimes you might have the same event on here and over there. So having it happen in real time and at a consistent level is really critical to them. So so, yes, like I said, sports betting is one area where this is of really a strong interest. And mainstream sports is also very interested in it. I mean, leagues, teams who are looking to build connections with their audiences and all the companies that are developing around that to support those experiences.

Like, last quarter, we brought onboard a customer by the name of Huddl. And Huddl is is a service and application that you can log on to to watch anything from college games down to, you know, little league and and school games. So maybe some of you have experienced it. And, you know, they’re they for the for the for the highest end of you know, if it’s the big 10, they’re gonna be charging a per view kind of fee or a subscription. But for the rest of it, they’re excited to be able to use our real time ad insertion technology to be able to get to be able to monetize that part of their service.

Ralph Schackart, Internet Analyst, William Blair: Great. Maybe transitioning to the the model, I think it’s maybe sometimes difficult for investors to understand. Can you give us some perspective? I know you don’t disclose exact royalty rates, but from the range of royalties that maybe start with mobile devices all the way through autos and how they might think about, you know, how you monetize those end markets.

Kevin Yeaman, CEO, Dolby: Mhmm. Yeah. So first of all, our end markets, maybe I should start with the end markets. Our our two largest end markets are what we call broadcast, which is essentially TVs and set top boxes, and mobile. And then, we also break out PC and consumer electronics, which are all the other devices in your home, sound bars and DMAs, etcetera.

And then we have another category. We break out, end markets when they become 10% of licensing revenue. So other notably includes, automotive, which is one of our fastest growing areas, gaming, the box office share we get from from Dolby Cinema. Those are the end end markets. The model, for device licensing is, it’s it’s per shipment.

So after, you know, thirty to ninety days depending on the customer after the end of a quarter, they report how much they shipped, and we charge an amount per device. Each of these technologies is an additional price. So if you have both foundational technologies and Dolby Atmos and Dolby Vision and imaging patents, then that’s gonna be a larger royalty for us. Some devices might just have a couple of those technologies. There does tend to be a correlation between kind of volume and price.

So mobile is gonna be is gonna tend to be one of our our lowest ASPs. I mean, that could be, you know, under a dollar or tens of cents depending on how much technology, whereas automotive is going to be typically our highest where you could be much much higher than our average.

Ralph Schackart, Internet Analyst, William Blair: Maybe if we walk through some of the growth factors, Android mobile, auto, and some of the others and sort of kind of frame how you’re returning back to growth. And then maybe to bolt on another one, you know, investors have been really focused. The question I get often is when does Dolby start really growing again?

Kevin Yeaman, CEO, Dolby: Mhmm.

Ralph Schackart, Internet Analyst, William Blair: And so maybe we can kind of lead into that and then remind us of your long term growth rate and and how you get there.

Kevin Yeaman, CEO, Dolby: Yeah. So, let me take the second part of the question, first. So, we talked a little bit earlier about this, this construct between foundational and Dolby Vision, Dolby Atmos imaging patents. And and we started breaking that around 02/2021. You might remember that 2021 was the year that everybody during the pandemic bought TVs and PCs.

So there was a big, spike in consumer device shipments. We grew quite nicely as a result. And then since then, we were seeing declines. It was a pretty big hangover from that in ’22 and even ’23 and ’24 device shipments were were were still coming down. And so that weighed on our foundational business.

We saw declines in foundational over each of the last three years. On the other hand, Dolby Atmos, Dolby Vision and Imaging patents, as I said earlier, grew on average on a compounded annual growth rate of of 20% a year over those four years. Faced with the same device environment, but it’s just that we’re getting on more cars. We’re getting on more mobile devices. We’re getting on more TVs.

So so a couple things looking forward. One, as we came into the year, we saw the consumer device, shipment outlook stabilizing, and we continue to believe that Dolby Atmos, Dolby Vision imaging patents can grow at a compound at a growth rate of between 1525% a year. That category is now 40% of the revenue, so it’s gonna have a it started 15 when we broke this out in 02/2021. So one, it’s contributing more to the overall growth rate. And two, as foundational stabilizes, that’s what gives us the ability to to drive to drive growth.

And that’s why coming into this year, we did guide to growth this year as you pointed out earlier. And that also is the reason between our part of the reason between the guiding for the increase in operating margins, which we also increased last year.

Ralph Schackart, Internet Analyst, William Blair: Great. And then maybe kind of transitioning to more current events just on the macro and tariffs. I know you talked about on the last call, but if you could kind of frame the potential impact if tariffs persist on on your model.

Kevin Yeaman, CEO, Dolby: Yeah. So what we said on the last call, and I’ll just say right away that I don’t think I would you know, even today, I’m not sure I would change what I said a month ago on the last call, which is that, you know, the tariffs don’t impact us significantly directly in the sense of paying tariffs. We have a little bit of cinema product revenue, but it’s not material. But obviously, what’s important to us as we’ve talked about is device shipments. Tariffs can affect that, but it’s a broad range of things.

Tariff, trade policy more broadly, just just the health the health of consumer spending. All of those things have an impact on ultimately how many devices are being purchased. So, I guess it was about a month ago that we were we were doing our earnings call. Our take at that time, and I like I said, I don’t think it will change significantly is we right. As things stand, we would say it probably looks like there could be some slight headwinds from that.

There’s some things that mitigate it. As I said, our two largest categories are TV and mobile. Turns out that the point of manufacturer for most TVs even for Chinese manufacturers is Mexico. So so so that’s a good mitigating fact for us. Mobile, is a category where while it’s fundamentally based on unit shipped, that that industry tends to have a higher propensity for us of minimum volume commitments, which is to say that we’re not as sensitive to, in the near term to to the fluctuations in device shipments.

And then as it turns out, auto, which is which is our, you know, a fast growing category for us, Most of that is most of that is not we have, we’re just getting started really in the in The US. So we have a lot of Chinese manufacturers for China that’s not affected, and a lot of European manufacturers and that are shipping into to to various places. So, but still, we think it could result in slight headwinds. But the main takeaway was that could change on a dime because things are changing every day. So we widened the range.

We lowered it just a little bit at the midpoint, but we widened the range to reflect the fact that if if there is continued escalation or dragging out, then or it’s really beginning to weigh on the consumer, then that could put us at the lower end of the range. And if it’s we start seeing trade deals and it’s resolved kind of at the higher end. But I would say compared to a month ago, I just I don’t think there’s been any real significant change to what I would say about that.

Ralph Schackart, Internet Analyst, William Blair: Great. We’re coming close to the end. I’ll pause here to see if there’s any any questions.

Kevin Yeaman, CEO, Dolby: Yes. Well, I look. I think always our goal is to get a fair price for what we’re doing, and we’re also trying to set it at a you know, maintain that price at a rate where we can get these very high adoption rates. That’s part of the value of the ecosystem is getting this virtuous cycle where the more content you have, the more devices adopt. The more devices adopt, the more content you get, and that becomes a kind of what establishes the durability of our ecosystem.

So so, yes, of course, our discussions are always about the the the value of the technology. And we think we get a fair you know, we establish fair pricing and get strong margins and have a very durable business model where these relationships can last decades and have. Oh, no, no. When when we sign on a new customer for a set of technologies and a device type, we’re agreeing on the price then. That that’s when we’re agreeing on the price.

And then over time, like I said, often over decades, they are shipping products against against that. And then but of course throughout the course of that relationship, we will have discussions about new technologies for those devices or technologies for additional devices and each one of those is where we would have the pricing discussion. Yes. Yes. Yes.

No. They’re good in the examples I gave. So it could be there could also be infrastructure providers who are selling to the sports better. So so that or for any of these so we could be we could be selling to that kind of white label service provider or to the actual the the the face to the customer, the the the sports team, the sports betting. Yes.

In fact, the parlor is sort of an a use case we hadn’t anticipated, but it but it’s an interesting one nonetheless. But for the most part, you should think of this as a solution for digital experiences. You’ll be experiencing them on your phones and on your PC and across all your devices. Yeah. Mhmm.

Yes? Yeah. Sure. So Dolby Cinema is our branded theater experience that is fully inclusive of Dolby Vision and Dolby Atmos. The US is where we have our largest presence approaching about a 70 screens and and and we announced at CinemaCon earlier this year doing 40 more so we’ll get to over 200 in The US.

And then in Korea, we have a relationship with Mega Box where we have, I wanna say, about a half a dozen screens, but they also we also announced an expansion there. So we’re seeing more screens going to South Korea. At the same time, we talked about our entry into the Indian market. So we’re gonna be seeing our first six screens go into India. The the I mean, the cinema market is a whole subject upon itself, but the one thing I’ll say about it is that where there is strength is the premium movie going experience.

Since the four or five years ago, really since the onset of the pandemic, the percentage of the box office that accrues to premium experiences has increased significantly. And so as, the industry comes out of the effects of the pandemic and the strikes and the list of things they’ve had to deal with, where they’re looking to invest is that premium movie going experience and Dolby Cinema is is the best way to experience a movie. So we are beginning to see a lot of interest from exhibitors now that they’re kinda coming out of that period of time of where they’re where they want to invest their capital invest, dollars is in premium movie going experiences.

Ralph Schackart, Internet Analyst, William Blair: Unfortunately, we’re out of time. Kevin, thank you so much for attending our conference and, for your time today. And then thank you for your interest in Dolby, and the breakout room will be in Richardson upstairs. Thank you very much.

Kevin Yeaman, CEO, Dolby: Thank you.

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