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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-11-18 compared with 2024-11-19 · 241 added, 242 removed, 1426 unchanged (25% of the section changed)

1 unchanged sentence

Interest Rate Sensitivity

As of September 27, 2024, we had cash and cash equivalents of $482.0 million, which consisted of cash.

In addition, we had long-term investments of $89.3 million, which primarily consisted of an equity method investment and an equity security without a readily determinable value.

As of September 26, 2025, we had cash and cash equivalents of $701.9 million, which consisted of cash and highly-liquid money market funds.

In addition, we had short-term and long-term investments of $80.9 million, which primarily consisted of equity method investments and equity securities without a readily determinable value.

Our investment policy is focused on the preservation of capital and support for our liquidity requirements.

4 unchanged sentences

Foreign Currency Exchange Risk

We maintain business operations in foreign countries, most significantly in Australia, China, Germany, Ireland, Poland, and the U.K.

We maintain business operations in foreign countries, most significantly in Australia, China, Germany, Ireland, Poland, and the United Kingdom ("U.K.").

Additionally, a portion of our business is conducted outside of the U.S.

16 unchanged sentences

dollar operating expenses.

The gains and losses from the effective portions of cash flow hedges are recorded at fair value as a component of AOCI, until the hedged item is subsequently reclassified into earnings in the same period in which the hedged transaction affects earnings, with the corresponding hedged item.

Amounts reclassified are recorded to the same line item in the consolidated statements of operations as the impact of the hedge transaction, concurrently with the hedged costs.

The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $1.6 million in fiscal 2024.

The gains and losses from the effective portions of cash flow hedges are recorded at fair value as a component of AOCI, until the hedged transaction affects earnings.

In the period when the hedged transaction affects earnings, the corresponding gains or losses of the cash flow hedge are recognized in the same line item in our consolidated statements of operations.

The pre-tax gain attributed to the effective portion of cash flow hedges recognized in AOCI was $1.0 million in fiscal 2025.

The pre-tax effective portion of the gain reclassified to the consolidated statements of operations was $2.1 million in fiscal 2024, and the pre-tax effective portion of the loss reclassified to the consolidated statements of operations in fiscal 2023 was not material.

The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $1.6 million in fiscal 2024.

The pre-tax effective portion of the gain reclassified to the consolidated statements of operations in fiscal 2025 was not material, and the pre-tax effective portion of the gain reclassified to the consolidated statements of operations was $2.1 million in fiscal 2024.

We also enter into foreign currency forward contracts to hedge against assets and liabilities for which we have foreign currency exchange rate exposure and selected anticipated expenses.

The contracts hedging receivables and payables are carried at fair value with changes in the fair value recorded to other income/(expense), net, in our

consolidated statements of operations.

The contracts hedging foreign currency denominated operating expenses are carried at fair value with changes in the fair value recorded to other comprehensive income until the hedged expenses are reported in our consolidated statements of operations.

The contracts hedging receivables and payables are carried at fair value with changes in the fair value recorded to other income, net, in our consolidated statements of operations.

As of September 26, 2025 and September 27, 2024, the total notional amounts of outstanding contracts were $195.9 million and $111.7 million, respectively.

22 unchanged sentences

We have audited the accompanying consolidated balance sheets of Dolby Laboratories, Inc.

and subsidiaries (the Company) as of September 27, 2024 and September 29, 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended September 27, 2024, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of September 26, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended September 26, 2025, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of September 26, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 27, 2024 and September 29, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended September 27, 2024, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 26, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended September 26, 2025, in conformity with U.S.

generally accepted accounting principles.

16 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company;

(2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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As discussed in Note 3 to the consolidated financial statements, revenue is derived principally from the licensing of technologies and patents to various types of licensees.

The Company recognized total licensing revenue of $1.2 billion for the year ended September 27, 2024.

The Company recognized total licensing revenue of $1.2 billion for the fiscal year ended September 26, 2025.

The Company estimates and records sales-based licensing revenue from its licensees’ shipments in the same period in which those shipments occur.

76 unchanged sentences

Total cost of revenue 160,132 140,496 152,566

Gross margin 1,133,225 1,147,178 1,112,433

Gross profit 1,188,998 1,133,225 1,147,178

Operating expenses:

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Net income including noncontrolling interest 256,492 264,316 201,644

net (income)/loss attributable to noncontrolling interest ( 2,491 ) ( 988 ) 189

net income attributable to noncontrolling interest ( 1,474 ) ( 2,491 ) ( 988 )

Net income attributable to Dolby Laboratories, Inc.

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Other comprehensive income:

Currency translation adjustments gains/(losses), net of tax benefit/(expense) of $ 65 , $ 73 , and ($ 245 )

Currency translation adjustments gains, net of tax benefit/(expense) of ($ 200 ), $ 65 , and $ 73

5,367 15,098 7,574

Unrealized gains/(losses) on investments, net of tax benefit of ($ 21 ), $ 54 , and $ 50

Unrealized gains on investments, net of tax benefit/(expense) of $ 0 , ($ 21 ), and $ 54

83 2,775 3,128

Unrealized gains/(losses) on cash flow hedges, net of tax benefit/(expense) of ($ 344 ), $ 85 , and $ 324

Unrealized gains on cash flow hedges, net of tax benefit/(expense) of ($ 106 ), ($ 344 ), and $ 85

1,251 197 4,286

Total other comprehensive income/(loss), net of tax 18,070 14,988 ( 42,153 )

Total other comprehensive income, net of tax 6,701 18,070 14,988

Total comprehensive income 263,193 282,386 216,632

comprehensive (income)/loss attributable to noncontrolling interest ( 2,764 ) ( 1,319 ) 731

comprehensive income attributable to noncontrolling interest ( 1,505 ) ( 2,764 ) ( 1,319 )

Comprehensive income attributable to Dolby Laboratories, Inc.

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Net income — — — — — 200,656 — 200,656 988 201,644

Other comprehensive loss, net of tax — — — — — — ( 41,611 ) ( 41,611 ) ( 542 ) ( 42,153 )

Other comprehensive income, net of tax — — — — — — 14,657 14,657 331 14,988

Distributions to noncontrolling interest — — — — — — — — ( 266 ) ( 266 )

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Tax withholdings on vesting of restricted stock ( 422 ) — — — ( 31,144 ) — — ( 31,144 ) — ( 31,144 )

Common stock transfers - Class B to Class A 1 — ( 1 ) — — — — — — —

Deconsolidation of subsidiary — — — — — ( 820 ) — ( 820 ) 750 ( 70 )

Equity issued in connection with business combination — — — — 10,004 — — 10,004 11,194 21,198

Balance as of September 29, 2023 59,674 $ 53 36,086 $ 41 $ — $ 2,391,990 $ ( 36,984 ) $ 2,355,100 $ 17,084 $ 2,372,184

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Repurchase of common stock ( 1,936 ) ( 2 ) — — ( 116,341 ) ( 43,658 ) — ( 160,001 ) — ( 160,001 )

Excise tax on common stock repurchases — — — — ( 261 ) — — ( 261 ) — ( 261 )

Cash dividends declared and paid on common stock — — — — — ( 114,579 ) — ( 114,579 ) — ( 114,579 )

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Tax withholdings on vesting of restricted stock ( 450 ) — — — ( 39,075 ) — — ( 39,075 ) — ( 39,075 )

Common stock transfers - Class B to Class A 415 — ( 415 ) — — — — — — —

Purchase of non-controlling interest in business combinations — — — — ( 5,282 ) — — ( 5,282 ) ( 4,638 ) ( 9,920 )

Deconsolidation of subsidiary — — — — — 677 — 677 ( 677 ) —

Equity issued in connection with business combination — — — — 360 — — 360 362 722

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Repurchase of common stock ( 1,620 ) ( 2 ) — — ( 135,296 ) 10,306 — ( 124,992 ) — ( 124,992 )

Excise tax on common stock repurchases — — — — ( 261 ) — — ( 261 ) — ( 261 )

Cash dividends declared and paid on common stock — — — — — ( 126,599 ) — ( 126,599 ) — ( 126,599 )

2 unchanged sentences

Common stock transfers - Class B to Class A 1,011 1 ( 1,011 ) ( 1 ) — — — — — —

Purchase of non-controlling interest in business combinations — — — — ( 5,282 ) — — ( 5,282 ) ( 4,638 ) ( 9,920 )

Deconsolidation of subsidiary — — — — — 677 — 677 ( 677 ) —

Equity issued in connection with business combination — — — — 360 — — 360 362 722

Balance as of September 26, 2025 60,803 $ 54 34,660 $ 40 $ — $ 2,634,980 $ ( 12,517 ) $ 2,622,557 $ 9,389 $ 2,631,946

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Impairment loss on internally developed software — — 16,225

Share of net income of equity method investees, net of cash distributions ( 707 ) ( 2,023 ) ( 60 )

Other non-cash items affecting net income ( 1,108 ) 3,305 2,346

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Proceeds from maturities of marketable securities — 157,729 176,833

Proceeds from sale of assets held for sale 16,881 — —

Purchases of property, plant, and equipment ( 36,348 ) ( 30,007 ) ( 30,339 )

Business combinations, net of cash and restricted cash acquired ( 487,877 ) 25,703 ( 38,171 )

Business combinations, net of cash and restricted cash acquired, and other related payments ( 1,362 ) ( 487,877 ) 25,703

Purchases of intangible assets ( 5,593 ) — —

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Distributions to noncontrolling interest ( 1,847 ) ( 5,164 ) ( 266 )

Payment of excise tax on repurchase of common stock ( 261 ) — —

Purchase of noncontrolling interest in business combinations — ( 9,920 ) —

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Actual results could differ from our estimates.

Change in Presentation

During fiscal 2025, we changed the presentation of our share of net income from equity method investees and cash distributions from equity method investees within the consolidated statements of cash flows.

Our share of net income from equity method investees, previously presented in "other non-cash items affecting net income," and cash distributions from our equity method investees, previously presented within "changes in operating assets and liabilities," are now presented in "share of net income of equity method investees, net of cash distributions." As such, prior period amounts have been reclassified to conform to current period presentation.

These reclassifications had no impact of total net cash provided by operating activities.

Our fiscal year is a 52 or 53 week period ending on the last Friday in September.

The fiscal years presented herein include the 52 week period ended September 27, 2024 (fiscal 2024) and September 29, 2023 (fiscal 2023), and the 53 week period ended September 30, 2022 (fiscal 2022).

The fiscal years presented herein include the 52 week period ended September 26, 2025 (fiscal 2025), September 27, 2024 (fiscal 2024), and September 29, 2023 (fiscal 2023).

Our fiscal year ending September 25, 2026 (fiscal 2026) will consist of 52 weeks.

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We monitor and manage the overall counterparty credit risk exposure of our cash balances to individual financial institutions on an ongoing basis.

Our investment portfolio consists of investment-grade securities diversified amongst security types, industries, and issuers.

Our investment portfolio may consist of investment-grade securities diversified amongst security types, industries, and issuers.

All of our securities are held in custody by large national financial institutions.

Our investment policy limits the amount of credit exposure to a maximum of 5 % of our total portfolio to any one issuer, except for the U.S.

Treasury, and we believe no significant concentration risk exists with respect to these investments.

Treasury, and we believe no significant concentration risk exists

with respect to these investments.

We also mitigate counterparty risk through entering into derivative contracts with high-credit-quality financial institutions.

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We manage the credit risk posed by non-U.S.

customers by performing regular evaluations of the creditworthiness of our licensing customers and recognize revenue in accordance with US GAAP.

customers by performing regular evaluations of the creditworthiness of our licensing customers and recognize revenue in accordance with U.S.

In fiscal 2025, 2024 and 2023, we did not have any individual customers that accounted for 10% of our total revenue.

For fiscal 2022, we had one individual customer whose revenue exceeded 10% of our total revenue.

Cash and Cash Equivalents

We consider all short-term highly liquid investments with original maturities of 90 days or less from the date of purchase to be cash equivalents.

Cash and cash equivalents primarily consist of funds held in general checking accounts, money market accounts, and U.S.

agency securities.

Cash and cash equivalents primarily consist of funds held in general checking accounts and money market accounts.

Restricted Cash

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Restricted cash may also consist of other amounts for which contractual conditions restrict the use of the cash for general operations.

Historically, all of our investments are classified as AFS, with the exception of our mutual fund investments held in our SERP, which are classified as trading securities, and our equity securities.

Our investments primarily consist of our equity securities and our mutual fund investments held in our SERP, which are classified as trading securities.

Investments that have an original maturity of 91 days or more at the date of purchase and a current maturity of less than one year are classified as short-term investments, while investments with a current maturity of more than one year are classified as long-term investments.

Our AFS securities, if any, and trading securities are recorded at fair value in our consolidated balance sheets.

Unrealized gains and losses on our AFS securities are reported as a component of AOCI, while realized gains and losses and credit losses are reported as a component of net income.

AFS securities, if any, and trading securities held in our SERP are recorded at fair value in our consolidated balance sheets.

Unrealized gains and losses on AFS securities are reported as a component of AOCI, while realized gains and losses and credit losses are reported as a component of net income.

Upon sale, gains and losses are reclassified from AOCI into earnings, and are determined based on specific identification of securities sold.

We evaluate our investment portfolio for impairment by comparing the fair value with the cost basis for each of our investment securities.

If the fair value of our AFS securities is less than amortized cost, such securities are considered impaired.

If the fair value of the AFS securities, if any, is less than amortized cost, such securities are considered impaired.

If we have the intent to sell the debt security, or if it is more likely than not that we will be required to sell the debt security before recovery of its amortized cost, the difference between the amortized cost (net of allowance, if any) and the fair value of the securities is reported as an impairment loss in net income.

Impaired AFS securities that we intend to hold are evaluated to determine whether we need to recognize an allowance for credit losses, limited to the difference between the fair value and amortized cost of the security.

Impaired debt securities that we intend to hold are evaluated to determine whether we need to recognize an allowance for credit losses, limited to the difference between the fair value and amortized cost of the security.

Equity Securities

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We record dividends or other equity distributions as reductions in the carrying value of the investment.

Our share of the equity method investee's net income or loss is included in other income/(expense), net in the consolidated statements of operations, and was $ 14.2 million, $ 5.1 million, and $ 5.0 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

Our equity method investment is included within long-term investments in our consolidated balance sheets.

We also hold several investments in equity securities of privately-held companies without a readily determinable fair value.

We elected to account for these investments using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer.

Our share of the equity method investee's net income or loss is included in other income/(expense), net in the consolidated statements of operations.

Our equity method investments are included within long-term investments in our consolidated balance sheets.

We also hold several investments in equity securities of privately-held companies without a readily determinable fair value, and equity securities of publicly traded companies with a readily determinable fair value.

The equity securities without a readily determinable fair value are accounted for using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer.

We perform a qualitative assessment at each reporting date to determine whether there are triggering events for impairment.

These equity securities are included within prepaids and other current assets and long-term investments in our consolidated balance sheets.

The equity securities with a readily determinable fair value are

measured at fair value, with any gains or losses recognized in other income, net on the consolidated statements of operations.

These equity securities are included within short-term and long-term investments in our consolidated balance sheets.

Allowance for Credit Losses

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In determining the provision, we pool receivables with similar risk characteristics to evaluate the collectability of our receivables.

Risk characteristics considered in creating these risk pools include assessing historical or expected loss patterns, credit ratings, current macroeconomic conditions that could impact collectability of

cash flows, and structure of customer agreements.

In cases where circumstances have changed such that specific customers no longer share similar risk characteristics, customers are excluded from their current pool and their risk profiles are evaluated separately.

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For business combinations, we recognize the identifiable assets acquired, the liabilities assumed and any non-controlling interests in an acquiree, which are measured based on the acquisition date fair value.

Goodwill is measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date.

measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date.

We use significant estimates and assumptions to determine the fair value of assets acquired and liabilities assumed, any contractual obligations assumed, pre-acquisition contingencies, and contingent consideration, and the related useful lives of the acquired assets, when applicable, as of the acquisition date.

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Intangible assets are stated at their original cost less accumulated amortization, and those with definite lives are amortized over their estimated useful lives.

Our intangible assets principally consist of acquired technology, patents, trademarks, customer relationships and contracts, the majority of which are amortized on a straight-line basis over their useful lives using a range from three to eighteen years .

Our intangible assets principally consist of acquired technology, patents, customer relationships and contracts, the majority of which are amortized on a straight-line basis over their useful lives using a range from three to eighteen years .

We review long-lived assets, including intangible assets, for impairment whenever events or a change in circumstances indicate an asset or asset group’s carrying value may not be recoverable.

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We recognize revenue when we satisfy a performance obligation by transferring control over the use of a license, product, or service to a customer.

For additional financial information and a summary of our accounting policy, refer to Note 3.

"Revenue Recognition" to our consolidated financial statements.

For additional financial information and a summary of our accounting policy, refer to Note 3 "Revenue Recognition" to our consolidated financial statements.

Cost of Revenue

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2024 September 29,

Foreign currency transaction gains/(losses) $ 1,800 $ 536 $ ( 1,283 )

Foreign currency transaction gains $ 1,252 $ 1,800 $ 536

Non-designated Hedges.

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Amounts reclassified are recorded to the same line item in the consolidated statements of operations as the impact of the hedge transaction, concurrently with the hedged costs.

The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $ 1.6 million in fiscal 2024.

The pre-tax gain attributed to the effective portion of cash flow hedges recognized in AOCI was $ 1.0 million in fiscal 2025.

The pre-tax loss attributed to the effective portion of cash flow hedges recognized in AOCI was $ 1.6 million in fiscal 2024.

The pre-tax effective portion of the gains reclassified to the consolidated statements of

operations in fiscal 2025 was not material.

The pre-tax effective portion of the gains reclassified to the consolidated statements of operations was $2.1 million in fiscal 2024.

The pre-tax effective portion of the losses reclassified to the consolidated statements of operations in fiscal 2023 was not material.

We use the asset and liability method, under which deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax bases of assets and liabilities, and NOL carryforwards are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed.

In assessing the realizability of deferred tax assets, we

consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The realization of deferred tax assets is additionally dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

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Where it is determined that a new accounting pronouncement will result in a change to our financial reporting, we take the appropriate steps to ensure that such changes are properly reflected in our consolidated financial statements or notes thereto.

Standards Not Yet Effective

Adopted Standards

Segment Reporting.

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Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, among other expanded disclosures.

This standard will be effective for Dolby's annual period beginning September 28, 2024 and interim periods beginning September 27, 2025, with early adoption permitted, and will be applied retrospectively to all periods presented in the financial statements.

We are currently in the process of evaluating the impact of the standard's adoption on our consolidated financial statements and related disclosures.

We adopted this standard during the fourth quarter of fiscal 2025 on a retrospective basis.

The adoption did not have a material impact on consolidated financial statements.

See Note 16, " Operating Segments and Geographic Information ," for more information.

Standards Not Yet Effective

Income Taxes.

1 unchanged sentence

Improvements to Income Tax Disclosures , which requires further enhancement of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

This standard is effective for Dolby beginning September 27, 2025 on a prospective basis, but early adoption is permitted.

This standard is effective for Dolby beginning September 27, 2025 on a prospective basis.

We are currently in the process of evaluating the impact of the standard's adoption on our consolidated financial statements and related disclosures.

Income Statement.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting— Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40) , which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in notes to financial statements, including purchases of inventory, employee compensation, depreciation, amortization of intangible assets, and selling expenses.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in notes to financial statements, including purchases of inventory, employee compensation, depreciation, amortization of intangible assets, and selling expenses.

In January 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date , which clarified the effective date of ASU 2024-03.

This standard will be effective for Dolby's annual period beginning September 25, 2027 and interim periods beginning September 30, 2028, with early adoption permitted.

We are currently in the process of evaluating the impact of the standard's adoption on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which eliminates references to the previous stage-based model, and requires capitalization of software costs when

management has committed to the software project and it is probable the software will be completed and perform its intended use.

This standard is effective for Dolby beginning September 30, 2028, and may be applied prospectively, retrospectively, or using a modified transition approach, with early adoption permitted.

We are currently in the process of evaluating the impact of the standard's adoption on our consolidated financial statements and related disclosures.

Revenue Recognition

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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 solutions through our platform Dolby.io to companies building real-time digital experiences that increase audience engagement.

We also offer solutions through our platform Dolby OptiView (previously named Dolby.io) to companies building real-time digital experiences that increase audience engagement.

Our solution provides the capability to stream high quality audiovisual content in ultra-low latency which reduces the delay between the action and the viewer.

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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.

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 return 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.

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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 2024, we recorded a favorable adjustment of approximately $ 1 million.

In the second and third quarters of fiscal 2024, we recorded unfavorable adjustments of $ 6 million and $ 7 million, respectively.

In the fourth quarter of fiscal 2024, we recorded a favorable adjustment of approximately $ 6 million.

Each of these adjustments is primarily related to shipments that occurred in the prior two quarters, and is largely based on actual royalty statements received from licensees.

In the first and second quarters of fiscal 2025, we recorded favorable adjustments of approximately $ 17 million and $ 1 million, respectively.

In the third and fourth quarters of fiscal 2025, we recorded unfavorable adjustments of approximately $ 4 million and $ 1 million, respectively.

Each of these adjustments is

primarily related to shipments that occurred in the prior two quarters, and is largely based on actual royalty statements received from licensees that differed from our estimates.

Fixed and guaranteed licensing fees.

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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.

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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.

We offer solutions through our Dolby OptiView 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.

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We generate administrative fees for managing patent pools on behalf of third party patent owners through our subsidiary, Via LA.

As an agent to licensors in the patent pool, Via LA receives a share of the sales-based royalty that the patent pool licensors earn from licensees.

As an agent to licensors in the patent pool, Via LA 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.

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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 and deferred revenue that is typically satisfied within one year.

Our contract liabilities consist of advance payments and billings in advance of performance, typically satisfied within one year.

The non-current portion of contract liabilities is separately disclosed in our consolidated balance sheets.

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Accounts Receivable and Contract Assets

September 27,

Accounts Receivable and Contract Assets, net September 26,

2025 September 27,

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Allowance for Credit Losses Beginning Balance Charges/(Credits)

to S&M and G&A Additions/(Deductions) Ending Balance

to S&M and G&A Deductions Ending Balance

For fiscal year ended:

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September 26, 2025 6,836 2,434 ( 988 ) 8,282

Allowance for credit losses includes the provision for estimated credit losses on our sales-type leases, which was not material as of September 27, 2024 and as of September 29, 2023.

Allowance for credit losses includes the provision for estimated credit losses on our sales-type leases, which was not material as of September 26, 2025 and September 27, 2024.

September 26,

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Total prepaid expenses and other current assets $ 51,873 $ 69,994

Other current assets includes certain acquired assets of $18.2 million as part of the acquisition of GE Licensing, which we plan to sell shortly after the acquisition date.

Other current assets included certain assets held for sale initially valued at $ 18.2 million as of September 27, 2024, and the estimated fair value of the assets was subsequently increased by $ 6.3 million for a total value of $ 24.5 million.

During fiscal 2025, we sold $ 15.8 million of the assets classified as held for sale, and the remaining assets no longer met the criteria for held for sale, and as such, we reclassified $ 8.7 million in assets held for sale to short-term and long-term investments.

Refer to Note 15 " Business Combinations " for more information.

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Other liabilities 48,369 52,551

52,551 29,555

Total other non-current liabilities $ 99,843 $ 135,852

(1) Refer to Note 12 " Income Taxes" for additional information related to our tax liabilities.

(2) Other liabilities includes a contingent liability of $ 14.2 million acquired as a part of the GE Licensing acquisition.

Refer to Note 15, " Business Combinations " for more information.

Investments and Fair Value Measurements

Our cash, cash equivalents, and investments declined significantly as a result of the business combinations entered into in fiscal 2024.

Refer to Note 15 " Business Combinations " for more information.

In general, we use cash holdings to purchase investment-grade securities diversified among security types, industries, and issuers.

Our cash equivalents consist of highly-liquid money market funds.

Our mutual fund investments held in our SERP are classified as trading securities.

Derivative contracts are used to hedge currency risk, and these are carried at fair value and classified as other current assets, other non-current assets, and accrued liabilities in the consolidated balance sheets.

Our cash and investment portfolio consisted of the following (in thousands):

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Cash $ 529,422 $ — $ — $ 529,422 $ 529,422 $ — $ —

Cash equivalents:

Money market funds 172,471 — — 172,471 172,471 — —

Cash and cash equivalents 701,893 — — 701,893 701,893 — —

Short-term investments:

Marketable equity securities 703 — — 703 703 — —

Short-term investments 703 — — 703 703 — —

Long-term investments:

Other investments 80,205 — — 80,205 — — —

$ 89,267 $ — $ — $ 89,267 $ — $ — $ 76,000

Long-term investments 80,205 — — 80,205 — — —

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Included in other current assets $ — $ 1,442 $ — $ 1,442 $ — $ 1,442 $ —

(1) Other investments as of September 27, 2024 is primarily comprised of our equity method investment in Access Advance of $ 83.9 million and an equity security without a readily determinable fair value, valued at $ 5.0 million.

Other investments increased in fiscal 2024 as a result of our acquisition of GE Licensing.

Refer to Note 15 for more information.

As of September 29, 2023, all of our investments in debt securities were measured at fair value, and were recorded within cash equivalents and both short-term and long-term investments in our 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 have been classified as AFS securities.

Derivative contracts are used to hedge currency risk, and these are carried at fair value and classified as other assets and other liabilities.

As of September 29, 2023, our investments in debt securities consisted of corporate bonds, government bonds, municipal debt securities, U.S.

agency securities, commercial paper, and certificate of deposit.

In addition, our cash and cash equivalents also consisted of highly-liquid money market funds, government bonds, and commercial paper.

Consistent with our investment policy, none of our municipal debt investments have been supported by letters of credit or standby purchase agreements.

included in other non-current assets — 111 — 111 — 111 —

Included in other accrued liabilities — — ( 48 ) ( 48 ) — ( 48 ) —

September 27, 2024

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Cash $ 482,047 $ — $ — $ 482,047 $ 482,047 $ — $ —

Cash equivalents:

Commercial paper 1,514 — — 1,514 — 1,514 —

Money market funds 139,831 — — 139,831 139,831 — —

Government Bonds 1,731 — — 1,731 1,731 — —

Cash and cash equivalents 482,047 — — 482,047 482,047 — —

Short-term investments:

Certificate of deposit 530 — — 530 — 530 —

agency securities 5,956 1 ( 7 ) 5,950 — 5,950 —

Government bonds 50,220 3 ( 384 ) 49,839 46,246 3,593 —

Commercial paper 5,843 — ( 3 ) 5,840 — 5,840 —

Corporate bonds 61,803 — ( 431 ) 61,372 — 61,372 —

Municipal debt securities 15,801 — ( 184 ) 15,617 — 15,617 —

Short-term investments 140,153 4 ( 1,009 ) 139,148 46,246 92,902 —

Long-term investments:

Government bonds 33,227 — ( 1,046 ) 32,181 32,181 — —

Corporate bonds 39,057 6 ( 589 ) 38,474 — 38,474 —

Municipal debt securities 16,137 — ( 224 ) 15,913 — 15,913 —

Other investments 89,267 — — 89,267 — — 76,000

11,244 — — 11,244 — — —

Long-term investments 89,267 — — 89,267 — — 76,000

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Included in other current assets $ — $ 299 $ — $ 299 $ — $ 299 $ —

included in other non-current assets — 2 — 2 — 2 —

Included in other accrued liabilities — — ( 618 ) ( 618 ) — ( 618 ) —

Included in other non-current liabilities — — ( 24 ) ( 24 ) — ( 24 ) —

(1) Other investments as of September 29, 2023 is primarily comprised of our equity method investment in Access Advance of $ 5.9 million and an equity security without a readily determinable fair value, valued at $ 5.0 million.

Equity Securities

Our equity securities primarily consist of our equity method investments, including our equity method investment in Access Advance, of $ 68.5 million and $ 84.3 million as of September 26, 2025 and September 27, 2024,

respectively, and equity securities without a readily determinable fair value, valued at $ 11.8 million and $ 5.0 million as of September 26, 2025 and September 27, 2024, respectively.

The equity method investment and equity securities without a readily determinable value are recorded within long-term investments in our consolidated balance sheets.

The equity method investments are regularly assessed for impairment, and in the case of an impairment, we adjust the carrying value of our investment.

Our share of the equity method investee's net income or loss is included in other income/(expense), net on the consolidated statements of operations.

Our share of the equity method investee's net income was $ 24.1 million, $ 14.2 million, and $ 5.1 million in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

During fiscal 2025, we reclassified $ 8.7 million in assets held for sale to short-term and long-term investments.

Refer to Note 15, " Business Combinations " for more information.

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 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:

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Money Market Funds Not Applicable Daily $1 per share Not Applicable

Government Bonds ICE (Intercontinental Exchange) Daily Institutional Bond Quotes - evaluations based on various market and industry inputs Bloomberg

Certificates of Deposit ICE (Intercontinental Exchange) Daily Institutional Bond Quotes - evaluations based on various market and industry inputs Bloomberg

Commercial Paper U.S.

Bank Pricing Unit Daily Matrix Pricing Not Applicable

Corporate Bonds ICE (Intercontinental Exchange) Daily Institutional Bond Quotes - evaluations based on various market and industry inputs Bloomberg

Municipal Debt Securities ICE (Intercontinental Exchange) Daily Evaluations based on various market and industry inputs Bloomberg

Agency Securities ICE (Intercontinental Exchange) Daily Institutional Bond Quotes - evaluations based on various market and industry inputs Bloomberg

Int'l Government Bonds ICE (Intercontinental Exchange)

Extel Financial Ltd Daily Evaluations based on various market factors Bloomberg

As a part of the acquisition of GE Licensing, we acquired GE Licensing’s ownership interest in Access Advance, which increased our equity method investment by $ 76 million.

As a part of the acquisition of GE Licensing in fiscal 2024, we acquired GE Licensing’s ownership interest in Access Advance, which increased our equity method investment by $ 76 million.

This increase in our investment was classified as Level 3 within the fair value hierarchy, and measured using the discounted cash flows method, whereby the cash flows expected to be generated by the business are discounted to their present value using a rate of return that reflects the relative risk of the investment and the time value of money.

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We periodically evaluate our investments for impairment by comparing the fair value with the cost basis for each of our investment securities.

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 and for greater than twelve months as of September 29, 2023 (in thousands):

September 29, 2023

Less Than 12 Months Greater Than 12 Months

Investment Type Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

agency securities $ 853 $ ( 7 ) $ — $ —

Government bonds 26,756 ( 247 ) 40,235 ( 1,183 )

Commercial paper 5,840 ( 3 ) — —

Corporate bonds 79,846 ( 461 ) 14,634 ( 558 )

Municipal debt securities 23,365 ( 203 ) 8,166 ( 206 )

Total $ 136,660 $ ( 921 ) $ 63,035 $ ( 1,947 )

Although we had certain securities that were in an unrealized loss position as of September 29, 2023, 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 September 29, 2023, which are recorded within cash equivalents and both short and long-term investments in our consolidated balance sheets (in thousands):

We had no securities that were in an unrealized loss position as of September 26, 2025 and September 27, 2024, respectively.

Cash Equivalents Maturities

The following table summarizes the amortized cost and estimated fair value of our cash equivalents as of September 26, 2025, which are recorded within cash and cash equivalents in our consolidated balance sheets (in thousands):

Range of maturity Amortized Cost Fair Value

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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 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.

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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.

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):

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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.

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.

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Fiscal 2027 — 220

Fiscal 2028 and thereafter — 220

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Translation adjustments 4,132

Measurement period adjustments 4,235

Balance as of September 27, 2024 $ 533,208

Acquired goodwill (1)

Translation adjustments 1,757

Measurement period adjustments ( 5,065 )

Balance as of September 26, 2025 $ 529,900

(1) Refer to Note 15 " Business Combinations " for additional information related to our acquired goodwill, including the correction of an immaterial error impacting goodwill and amounts payable to patent administrative program partners.

(1) Refer to Note 15 " Business Combinations " for additional information related to our acquired goodwill.

Intangible Assets

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 are stated at their original cost less accumulated amortization, and principally consist of acquired patents, technology, and customer relationships and contracts.

Intangible assets subject to amortization consisted of the following (in thousands):

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Total $ 831,921 $ ( 434,864 ) $ 397,057 $ 823,093 $ ( 388,579 ) $ 434,514

During fiscal 2025, we purchased various patents for purchase consideration of $ 5.6 million and upon acquisition, these intangible assets had a weighted-average useful life of 14 years.

During fiscal 2024, we acquired $ 274.2 million and $ 24.6 million of identifiable intangible assets in connection with the acquisitions of GE Licensing and THEO, respectively.

During fiscal 2023, we acquired $ 86.0 million of identifiable intangible assets in connection with the acquisition of MPEG LA.

Refer to Note 15 " Business Combinations " for additional information.

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 consolidated statements of operations.

Amortization expense was $ 33.2 million, $ 28.6 million, and $ 29.0 million in fiscal 2024, 2023 and 2022, respectively.

Amortization expense was $ 45.3 million, $ 33.2 million, and $ 28.6 million in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

As of September 26, 2025, expected amortization expense of our intangible assets in future fiscal periods was as follows (in thousands):

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In valuing the PSOs, which are 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.

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 officers that have vested during the periods presented:

Grant Date Aggregate Shares Granted at Target Award Aggregate Shares Exercisable at Vest Date (1)

Percentage Vested of Target Award Vested Date

December 15, 2018 241,100 158,700 75 % December 2021

(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 September 26, 2025, an aggregate of 58,701 shares of PSOs were exercisable and outstanding.

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Exercises ( 538 ) 52.70

Forfeitures and cancellations ( 98 ) 94.24

Options outstanding as of September 26, 2025 3,259 72.71 5.10 $ 15,355

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On December 15, 2020, we granted PSUs to our executive officers for an aggregate of 66,138 shares, which vested in December 2023 at 80 % of the target award amount.

On December 15, 2021, we granted PSUs to our executive officers for an aggregate of 60,301 shares, which vested in December 2024 at 70 % of the target award amount.

As of September 26, 2025, PSUs which would vest for an aggregate of 255,589 shares at the target award amount ( 511,178 shares at 200 % of the target award amount) were outstanding.

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Non-vested as of September 26, 2025 4,130 $ 77.07

The fair value as of the respective vesting dates of RSUs were as follows (in thousands):

The fair value of vested RSUs (measured as of the vesting date) was as follows (in thousands):

Fiscal Year Ended

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Fiscal Period Announcement Date Record Date Payment Date Cash Dividend Per Common Share Dividend Payment

Q1 - Quarter ended December 29, 2023 February 1, 2024 February 13, 2024 February 22, 2024 $ 0.30 $ 28.7 million

Q2 - Quarter ended March 29, 2024 May 2, 2024 May 14, 2024 May 22, 2024 $ 0.30 $ 28.7 million

Q3 - Quarter ended June 28, 2024 August 7, 2024 August 19, 2024 August 27, 2024 $ 0.30 $ 28.6 million

Q4 - Quarter ended September 27, 2024 November 19, 2024 December 3, 2024 December 10, 2024 $ 0.33 $ 31.5 million (1)

(1) The dividend payment amount for the dividend declared in the fourth quarter of fiscal 2024 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.

Q1 - Quarter ended December 27, 2024 November 19, 2024 December 3, 2024 December 10, 2024 $ 0.33 $ 31.5 million

Q2 - Quarter ended March 28, 2025 January 29, 2025 February 11, 2025 February 19, 2025 $ 0.33 $ 31.8 million

Q3 - Quarter ended June 27, 2025 May 1, 2025 May 13, 2025 May 21, 2025 $ 0.33 $ 31.6 million

Q4 - Quarter ended September 26, 2025 July 31, 2025 August 12, 2025 August 20, 2025 $ 0.33 $ 31.6 million

On November 18, 2025, Dolby announced a cash dividend of $ 0.36 per share of Class A and Class B common stock, payable on December 10, 2025, to stockholders of record as of the close of business on December 2, 2025.

The estimated dividend payment of $ 34.4 million related to this cash dividend is 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.

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.

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.

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— — 5,536 5,536 — — 14,760 14,760

Income tax effect - benefit — — 65 65 — — 73 73

Income tax effect - benefit/(expense) — — ( 200 ) ( 200 ) — — 65 65

Net of tax ( 55 ) 952 5,336 6,233 2,602 ( 1,567 ) 14,825 15,860

Amounts reclassified from AOCI into earnings:

Realized gains/(losses) (2)

Realized gains (2)

138 405 — 543 194 2,108 — 2,302

Income tax effect - benefit/(expense) (3)

Income tax effect - expense (3)

— ( 106 ) — ( 106 ) ( 21 ) ( 344 ) — ( 365 )

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Realized gains or losses on foreign currency contracts designated as cash flow hedges are included in operating expenses in the consolidated statements of operations.

(3) The income tax benefit or expense is included within provision for income taxes in our consolidated statements of operations.

(3) The income tax expense is included within provision for income taxes in our consolidated statements of operations.

Earnings Per Share

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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.

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.

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Repatriation of Undistributed Foreign Earnings

As a result of the Tax Act, foreign accumulated earnings that were subject to the mandatory Transition Tax as of December 31, 2017, can be repatriated to the U.S.

As a result of the Tax Cuts and Jobs Act ("Tax Act"), foreign accumulated earnings that were subject to the mandatory Transition Tax as of December 31, 2017, can be repatriated to the U.S.

without incurring further U.S.

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federal and California were $ 0.9 million and $ 1.3 million, respectively, and will start to expire in fiscal 2034 and 2029, respectively.

Additionally, we had foreign NOL carryforwards of $ 8.1 million as of September 27, 2024, an amount which is not subject to expiration.

Additionally, we had foreign NOL carryforwards of $ 5.0 million as of September 26, 2025, which will carry forward indefinitely.

As of September 26, 2025, we had foreign tax credit and federal R&D tax credit carryforwards of $ 20.7 million and $ 28.8 million, respectively, which will start to expire in fiscal 2029 and fiscal 2035, respectively.

We had California R&D tax credits of $ 48.9 million, which will carry forward indefinitely, and foreign R&D tax credits of $ 6.1 million, which will start to expire in fiscal 2028.

We had California R&D tax credits of $ 48.6 million and foreign R&D tax credits of $ 7.7 million, which will carry forward indefinitely.

Valuation Allowance.

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Our effective tax rate was 15.5 % in fiscal 2025, compared with our federal statutory rate of 21.0 %, and with our effective tax rate in fiscal 2024 of 15.4 %.

The decrease in our effective tax rate was primarily due to a tax benefit related to the Transition Tax liability under the Tax Cuts and Jobs Act of 2017, which resulted from the application of a recent U.S.

Tax Court opinion in Varian Medical Systems, Inc.

Commissioner .

On August 26, 2024, the U.S.

Tax Court opined that a deduction for certain deemed foreign dividends can be claimed for otherwise taxable foreign dividends under the Transition Tax of the Tax Cuts and Jobs Act.

As a result of the opinion, we intend to timely file claims for refund to reduce a portion of our Transition Tax liability.

We recorded a benefit of $ 10.0 million with a corresponding increase of $ 10.8 million to taxes receivable and $ 0.8 million increase to uncertain tax benefit in fiscal 2024.

Additionally, we recognized tax benefits from previously unrecognized tax benefits due to a lapse in the statute of limitations and reduced benefit from foreign operations.

The increase in our effective tax rate was primarily due to lower tax benefits

related to settlement of stock-based awards and a non-recurring benefit related to the Transition Tax liability under the Tax Act recognized in fiscal 2024, partially offset by the recognition of tax benefits from previously unrecognized tax benefits due to the expiration of the statute of limitations and higher tax credits.

Our effective tax rate was 15.4 % in fiscal 2024, compared with our effective tax rate in fiscal 2023 of 19.4 %.

The increase in our effective tax rate was primarily due to lower tax benefits related to settlement of stock-based awards and reduced benefit from less R&D tax credits.

The decrease in our effective tax rate was primarily due to a tax benefit related to the Transition Tax liability under the Tax Act.

Additionally, we recognized tax benefits from previously unrecognized tax benefits due to a lapse in the statute of limitations and reduced benefit from foreign operations.

Uncertain Tax Positions

As of September 26, 2025, the total amount of gross unrecognized tax benefits was $ 83.7 million, of which $ 28.1 million, if recognized, would reduce our effective tax rate.

Our liability increased from fiscal 2023 primarily due to additional accruals in fiscal 2024, partially offset by releases due to the lapse of statute of limitations.

Our liability for unrecognized tax benefits is classified within other non-current liabilities in our consolidated balance sheets.

Our liability decreased from fiscal 2024 primarily due to releases from the expiration of the statute of limitations, partially offset by additional accruals in fiscal 2025.

Our liability for unrecognized tax benefits is classified within other non-current liabilities in our consolidated balance sheet.

Over the next twelve months, we estimate that this amount could be reduced by $1.5 million as a result of the expiration of certain statutes of limitations.

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To the extent accrued interest and penalties do not ultimately become payable, amounts accrued are reduced in the period that such determination is made and are reflected as a reduction of the overall income tax provision.

In fiscal 2024, our current tax provision was increased by interest expense of $ 3.3 million, while in fiscal year 2023, our current tax provision was increased by interest expense of $ 3.5 million.

In fiscal 2025, our current tax provision was decreased by the release of accrued interest expense of $ 12.2 million, while in fiscal year 2024, our current tax provision was increased by interest expense of $ 3.3 million.

Accrued interest and penalties are included within the related tax liability line item in our consolidated balance sheets.

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Our major tax jurisdictions are the U.S.

federal, California, New York, and Ireland.

federal, California, and Ireland.

Our operations in certain jurisdictions remain subject to examination for fiscal 2013 to 2023, some of which are currently under audit or review.

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federal tax year.

The resolution of each of these audits is not expected to be material to our consolidated financial statements.

The resolution of these audits could have a material impact to our consolidated financial statements.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations.

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foreign tax credit regulations, issued on January 4, 2022, introduced significant changes to foreign tax credit utilization.

However, additional relief has delayed the effective date of the final U.S.

foreign tax credit regulations until further guidance to withdraw or modify the temporary relief.

These provisions may have a material adverse effect on our future tax provisions unless modified.

The Organisation for Economic Co-operation and Development (“OECD”) published its model rules “Tax Challenges Arising From the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15% for certain multinational enterprises.

Many countries have implemented or are in the process of implementing the Pillar Two legislation, which will apply to Dolby beginning in fiscal year 2025.

While we do not currently estimate a material impact to our consolidated financial statements, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance.

However, temporary relief was granted and extended to delay the effective date of the final regulations until further notice.

These provisions may have a material adverse effect on our future tax provisions unless modified or withdrawn.

The OECD published its model rules “Tax Challenges Arising From the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15% for certain multinational enterprises.

Many countries have implemented or are in the process of implementing the Pillar Two legislation, became applicable to Dolby beginning in fiscal 2025.

Dolby recorded an immaterial amount in our fiscal 2025 consolidated financial statements.

We continue to monitor the impact as countries implement legislation and the OECD provides additional guidance.

In July 2025, the OBBBA was signed into law in the U.S.

OBBBA contains several corporate income tax provisions, including the extension of many expiring provisions from the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework, and restores the ability to elect immediate expensing of domestic research and experimental expenditures under Section 174 and 100% bonus depreciation for qualified property placed in service on or after January 20, 2025.

These provisions are generally effective beginning in fiscal 2026.

OBBBA did not have a material impact on our income tax expense or financial statements for fiscal 2025.

Dolby will continue to evaluate the effects of these provisions in future periods.

Restructuring

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Fiscal 2025 Restructuring Events

In September 2025, we initiated restructuring actions in order to centralize teams into fewer locations to provide better access to talent pools, encourage multi-disciplinary collaboration, and simplify operations.

In connection with this plan, we recorded expense in fiscal 2025 of $ 6.1 million in severance and other related benefits.

The remaining components of this plan are expected to be completed by the end of the second quarter of fiscal 2026, resulting in an additional charge of approximately $ 10 million in severance and other termination benefits.

Cash payment of the severance and other termination benefits are expected to be substantially completed by the end of the first quarter of fiscal 2026.

These activities are expected to result in estimated gross pre-tax operating income savings of approximately $ 20 million in fiscal 2026, due to estimated savings in compensation and benefits of impacted employees.

The impact of these estimated savings on our operating expenses will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

In November 2024, we initiated restructuring actions with the purpose of aligning our R&D resources, and to a lesser extent our S&M resources, with our highest strategic priorities.

In connection with this plan, we recorded expense in fiscal 2025 of $ 9.2 million in severance and other related benefits.

The remaining components of this plan were substantially completed by the end of fiscal 2025.

Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2025.

These activities resulted in estimated gross pre-tax operating income savings of approximately $ 20 million in fiscal 2025, due to estimated savings in compensation and benefits of impacted employees, which was consistent with our expectations.

The impact of these estimated savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Fiscal 2024 Restructuring Events

In April 2024, we initiated restructuring actions with the purpose of focusing our resources on our highest strategic priorities.

In connection with this plan, we recorded an expense in the third quarter of fiscal 2024 of $ 4.6 million in severance and other related benefits.

C ash payment of the severance and other termination benefits were substantially completed by the end of the fourth quarter of fiscal 2024.

These activities resulted in gross pre-tax operating income savings of approximately $ 3 million in fiscal 2024 and are expected to result in savings of approximately $ 11 million within fiscal 2025.

The impact of these estimated savings on our operating expenses have been and will be mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

In connection with this plan, we recorded an expense in fiscal 2024 of $ 4.6 million in severance and other related benefits.

C ash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024.

These activities resulted in gross pre-tax operating income savings of approximately $ 3 million in fiscal 2024 and resulted in savings of approximately $ 11 million within fiscal 2025, which was consistent with our expectations.

The impact of these estimated savings on our operating expenses was mostly offset by increased investment in our strategic priorities and the effects of inflation on our remaining expenses.

Fiscal 2023 Restructuring Events

In September 2023, we initiated a restructuring plan with the purpose of focusing our resources on our highest strategic priorities.

In connection with this plan, we recorded an expense in the fourth quarter of fiscal 2023 of $ 13.4 million in severance and other related benefits and an impairment loss of $ 16.9 million related primarily to internally developed software for projects we are no longer pursuing.

In continuation with this plan, we recorded an expense in the first quarter of fiscal 2024 of $ 7.4 million in severance and other related benefits.

Cash payment of the severance and other termination benefits were substantially completed by the end of the second quarter of fiscal 2024.

In continuation with this plan, we recorded an expense in fiscal 2024 of $ 7.4 million in severance and other related benefits.

Cash payment of the severance and other termination benefits were substantially completed by the end of fiscal 2024.

These activities resulted in gross pre-tax operating income savings of approximately $ 40 million within fiscal 2024, which was consistent with our expectations.

1 unchanged sentence

In June 2023, we implemented a focused restructuring plan, primarily consisting of workforce reductions and facility consolidations to improve execution in alignment with our strategy and to reduce our cost structure through improved utilization of our global infrastructure.

As a result of these actions, we recorded expense in the third quarter of fiscal 2023 of $ 10.9 million in severance and other related benefits and expense of $ 6.9 million related to a facility consolidation in New York, NY.

Actions and expenses related to this plan were substantially completed by the end of the second quarter of fiscal 2024.

Actions and expenses related to this plan were substantially completed by the end of fiscal 2024.

These activities resulted in gross pre-tax operating income savings of approximately $ 20 million in fiscal 2024, which was consistent with our expectations.

1 unchanged sentence

The table presented below summarizes the changes in our restructuring accruals (in thousands):

Severance Leased facility exit costs and other costs and adjustments Total

Severance Leased facility exit costs and other costs Total

Balance at September 29, 2023 $ 20,352 $ — $ 20,352

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Cash payments and adjustments ( 24,000 ) 29 ( 23,971 )

Non-cash adjustment for leased facility exit costs — ( 6,893 ) ( 6,893 )

Balance at September 27, 2024 2,765 — 2,765

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Balance at September 26, 2025 $ 4,665 $ — $ 4,665

Accruals for restructuring charges/(credits) incurred for the restructuring plan described above are included within accrued liabilities in our consolidated balance sheets, while restructuring charges are included within restructuring charges in our consolidated statements of operations.

Accruals for restructuring charges/(credits) incurred for the restructuring plans described above are included within accrued liabilities in our consolidated balance sheets, while restructuring charges are included within restructuring charges in our consolidated statements of operations.

Commitments and Contingencies

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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.

Our payment obligations may be suspended or reduced in certain circumstances, including the protracted closure of the Dolby Theatre.

We also hold the naming rights to Dolby Live at the Park MGM in Las Vegas, Nevada.

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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.

These donation agreements either transfer title of our audio and imaging products to the donees 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.

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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.

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.

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Business Combinations

There were no business combinations entered into during fiscal 2025.

On August 19, 2024, we acquired 100 % of the issued and outstanding equity interests of GE Intellectual Property Licensing, LLC and GE Technology Development, Inc., which, collectively with each of their subsidiaries, comprised General Electric’s intellectual property licensing business that primarily targeted the consumer digital media and electronics sectors ("GE Licensing" or the "acquiree").

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Additionally, we have estimated the fair values of the net tangible and intangible assets acquired, and liabilities assumed as of the acquisition date, with any amounts paid in excess of the net assets recorded as goodwill.

The fair values assigned to assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized, including potential changes to income tax-related accounts and certain assets held for sale.

We expect to finalize the valuation within the one year measurement period.

The fair values assigned to assets acquired and liabilities assumed were based on management’s estimates and assumptions.

It is impracticable to provide historical supplemental pro forma financial information along with earnings during the period subsequent to the acquisition due to the lack of access to historical information.

The following table summarizes the preliminary acquisition date fair values of the assets acquired and liabilities assumed (in thousands):

Recognized Identifiable Assets Acquired and Liabilities Assumed Purchase Price Allocation (Preliminary)

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed (in thousands):

Recognized Identifiable Assets Acquired and Liabilities Assumed Purchase Price Allocation

Cash and cash equivalents $ 2,232

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Purchase Consideration $ 434,211

We acquired certain assets valued of $ 18.2 million as part of the acquisition which we plan to sell shortly after the acquisition date.

These assets are classified as held for sale within prepaid expenses and other current assets on the consolidated balance sheets and are measured at fair value less cost to sell.

We initially acquired certain assets valued at $ 18.2 million and increased the estimated fair value of the assets held for sale by $ 6.3 million for a total value of $ 24.5 million.

These assets were classified as held for sale within prepaid expenses and other current assets on the consolidated balance sheets and are measured at fair value less cost to sell.

Acquired contingencies relate to contingent payments due under an assumed agreement.

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All of the goodwill recognized is expected to be deductible for income tax purposes.

The following table summarizes the preliminary fair values allocated to the various intangible assets acquired and the weighted-average useful lives over which they will be amortized using the straight-line method:

The following table summarizes the fair values allocated to the various intangible assets acquired and the weighted-average useful lives over which they will be amortized using the straight-line method:

Purchase Price Allocation Weighted-Average Useful Life

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Total $ 274,197 11

The preliminary value of acquired intangibles was determined based on the present value of estimated future cash flows using the multi-period excess earnings method with the following inputs such as projected revenue attributable to licensors in the patent pools, revenue retention rate, maintenance sales and marketing expenses, income tax rate, post-tax returns for contributory assets, and discount rate.

The value of acquired intangibles was determined based on the present value of estimated future cash flows using the multi-period excess earnings method with inputs such as projected revenue attributable to licensors in the patent pools, revenue retention rate, maintenance sales and marketing expenses, income tax rate, post-tax returns for contributory assets, and discount rate.

Acquisition-related costs of $ 6.4 million were incurred during fiscal 2024.

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THEO' s products enable high-quality online video experiences for customers across sports and entertainment.

This acquisition expands on our suite of cloud solutions to provide seamless, synchronized viewer

experiences in sports and entertainment.

This acquisition expands on our suite of cloud solutions to provide seamless, synchronized viewer experiences in sports and entertainment.

We have included the financial results of THEO in our consolidated financial statements from the date of acquisition, and these results were not material.

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Total consideration, net of unrestricted cash acquired $ 139,060

The noncontrolling interest in Via LA includes $ 3.6 million of cash held in escrow that will be fully remitted to Dolby in exchange for Via LA common equity units after 18 months from the transaction close date.

The noncontrolling interest in Via LA includes $ 3.6 million of cash held in escrow that was remitted to Dolby in exchange for Via LA common equity units 18 months after the transaction close date.

The fair value of the noncontrolling interest was determined through the issuance of equity in lieu of cash.

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Intangible Assets Acquired (in thousands) (in years)

Licensor Relationships – AVC & Other $ 36,000 13

Licensor Relationships – AVC and Other $ 36,000 13

Licensor Relationships - HEVC 31,000 10

Implementer Relationships – AVC & Other 12,000 13

Implementer Relationships – AVC and Other 12,000 13

Implementer Relationships - HEVC 7,000 10

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These acquisition-related costs were included in G&A expenses in the consolidated statements of operations.

On January 31, 2022, we completed the acquisition of all outstanding interests of Millicast, a privately held company.

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 have included the financial results of Millicast in our consolidated financial statements from the date of acquisition, and these results were not material.

Additionally, the transaction costs associated with the acquisition were not material.

The total purchase consideration of the acquisition was $ 38.8 million.

We allocated $ 8.7 million in purchase consideration to identifiable intangible assets, which primarily consisted of developed technology, with estimated

useful lives of 1.5 years to 8 years.

We also recorded $ 31.7 million of goodwill, which is representative of our expectation of benefits and synergies from the integration of Millicast technology with our existing technology and the assembled workforce of Millicast.

Operating Segments and Geographic Information

Operating Segments

Operating segments are defined as components of an enterprise for which separate financial information is available, and which are evaluated regularly by the CODM, or decision-making group, in deciding how to allocate resources and assess performance.

Our CODM is our Chief Executive Officer.

Reporting segments are operating segments exceeding specified revenue, profit or loss, or asset thresholds for which separate disclosure of information is necessary.

We operate as a single reportable segment.

This reflects the fact that our CODM continues to evaluate our financial information and resources, and continues to assess the performance of these resources, on a consolidated basis.

All required financial segment information is therefore included in our consolidated financial statements.

We derive the majority of our revenue from licensing audio and video technology to electronics manufacturers, and a lesser portion of our revenue by offering premium audio and video technologies to cinema exhibitors.

Our CODM is our Chief Executive Officer, who reviews financial information presented on a consolidated basis to assess performance and allocate resources.

Our CODM uses consolidated net income, as reported on the consolidated statements of operations, as the primary measure of segment profit or loss by comparing actual results to the prior year comparative results and any internally and externally set expectations.

Our CODM does not assess segment performance or make operating decisions using asset or liability information.

The following table presents selected financial information and significant segment expenses for the periods presented (in thousands):

Fiscal Year Ended

September 26,

2025 September 27,

2024 September 29,

Total revenue $ 1,349,130 $ 1,273,721 $ 1,299,744

Cost of licensing (1)

56,907 64,314 64,642

Cost of products and services (1) (2)

71,681 69,441 82,731

Research and development expense (1) (2)

223,292 225,449 231,798

Sales and marketing expense (1) (2)

314,466 291,508 311,189

General and administrative expense (1) (2)

235,254 222,922 218,028

Restructuring charges 15,007 6,384 47,061

Stock-based compensation 128,514 119,825 118,486

Amortization of acquisition-related intangibles 40,856 15,552 10,056

Interest (income)/expense, net ( 15,376 ) ( 34,077 ) ( 28,086 )

Equity method investees’ net income ( 24,065 ) ( 14,212 ) ( 5,145 )

Other income, net (1) (3)

( 891 ) ( 5,864 ) ( 1,069 )

Income tax expense 46,993 48,163 48,409

Net income including noncontrolling interest 256,492 264,316 201,644

Net income attributable to noncontrolling interest ( 1,474 ) ( 2,491 ) ( 988 )

Net income attributable to Dolby Laboratories, Inc.

$ 255,018 $ 261,825 $ 200,656

(1) Excludes amortization of acquisition-related intangibles presented separately.

(2) Excludes stock-based compensation expense presented separately.

(3) Excludes our proportional share of net income in our equity method investees presented separately.

Geographic Information

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The share of earnings and net assets of the entities attributable to the limited member or LP, as the case may be, is reflected as noncontrolling interest in our consolidated financial statements.

Our interests in these consolidated affiliated entities and the location of the properties leased to Dolby Laboratories as of September 27, 2024 were as follows:

Entity Name Minority Ownership Interest Location Of Properties

Dolby Properties Burbank, LLC 49.0 % Burbank, California

As of September 26, 2025, we hold a 49.0 % minority ownership interest in Dolby Properties Burbank, LLC, which owns a facility in Burbank that we are leasing until 2030.

We also own 10.0 % minority ownership interest in Dolby Properties, LP, which owns a facility in Wootton Bassett, England.

During fiscal 2022, we ceased leasing the Wootton Bassett facility.

We also lease from our principal stockholder a commercial office building located at 100 Potrero Avenue in San Francisco, California under a term that expires on October 31, 2024.

We are no longer leasing the Wootton Bassett facility.

We also leased from our principal stockholder a commercial office building located at 100 Potrero Avenue in San Francisco, California under a term that expired on October 31, 2024.

Distributions

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk