DLB at MS notes - 2/27/19
CFO Lewis Chew along with the outgoing and incoming IR Mgr. Lewis is my favorite presenter ever, he is so forthcoming they send IR people(and sometimes HR people) with him lol.
- Went over the 605 and 606 revenue numbers, very explicit and did his best to use both number progressions to try to get to the real, underlying growth. 2019 is forecasted in the 6-9% range if it was possible to do an apples to apples comparison. They are still targeting double digit growth.
- Overview of how prominent Dolby tech was at CES and The Oscars.
- Of the 5 revenue buckets, PC is the only one with secular issues holding back growth. However, they do see traction in DA/DV and hope that could offset it.
- For revenue mix, over time they think Broadcast will hold steady, and Other will be the fast accelerator, driven by Dolby Cinema. They hope for DC to reach the 10% threshold and be broken out by itself.
- Good discussion on the DV eco-system, consider the ability to capture DV(hardware and personnel required) as the toughest constraint.
- Good discussion specific to Samsung and DV and they are the only major holdout as they promote HDR10+. Stressed DV is a more consistent standard while HDR10+ is more like a freeware software that can be implemented differently across the eco-system.
- Discussed DA eco-system, main takeaway is the DA soundbars are gaining traction and produce a surprising sound considering they do not have speakers throughout the room.
- Big discussion on live sports in DA and DV. There is some content in DA, while DV is on deck, just some trials. Thinks live sports can ultimately be the catalyst for adoption. Gave the analogy of HD, that is was high end until live sports and is now universal. Thinks that same thing could happen with DA and later DV.
- Early days for mobile adoption of DA/DV, think the growth lies ahead.
= Explained the effort to convert 35MM to DV, said it does require mastering, it is not automatic, but considers that a minor constraint and not a significant one.
- Very interesting point made, considers the incremental improvement in picture quality with DV is GREATER at the low end vs. the high end.
- Considers the TAM for DC as the 5K-7K premium screens(out of about 150K) total. With 200 in place and 200 more signed up, they have a long way to go with DC. Early adopters were AMC and the Chinese, but seeing significant geographic expansion.
- Dolby Voice - Early days, working through partners, centered on voice but has video. Totally different market and partners from the rest of their business
- Dimension is for binge watching at home, the features are designed for that user, can easily switch between sources, tune in or out the kids, and is directional. Not sure if this eventually is licensed or they continue to produce it.
- Cash flow will continue to be used for rising dividends and more buybacks. |
