Dolby

DLB · NYSE · Information Technology · Financials, fiscal 2016 to 2025

DLB · Last close · October 26, 2026

$63.08

Dolby's revenue rose 5.9% to $1.3 billion in fiscal 2025. Its operating margin was 19.6%, down from 20.3% a year earlier. Free cash flow was $436 million, up 46.6%. It paid out $252 million in dividends and buybacks, 58% of free cash flow. The diluted share count rose 0.2%.

Dolby Laboratories, Inc. Latest fiscal year ended September 26, 2025 10-K filed November 18, 2025 · 0001308547-25-000007 Updated October 11, 2026

Revenue

$1.3B

5.9%

Operating margin

19.6%

0.6 pts

Net income

$255M

2.6%

Free cash flow

$436M

46.6%

Return on capital

11.4%

1.1 pts

Market cap

$6.0B

Oct 26 close

P/E

26.8x

On $2.35 EPS, 4 qtrs

Operating margin is operating income as a share of revenue. Free cash flow is cash from operations minus capital spending. Return on capital is after-tax operating income as a share of the money invested in the business: debt plus equity, minus cash. Market cap is the last closing share price times the latest diluted share count, so it is approximate. P/E is the last close divided by diluted earnings per share over the last four quarters, or the latest fiscal year where the quarters aren't available; there is none when the company made a loss.

About these figures. Dolby has no borrowings, so debt is counted as zero.

What Dolby does

Dolby invents audio and video technologies and earns most of its money by licensing them. Its best-known are Dolby Atmos, a three-dimensional surround sound format, and Dolby Vision, a high dynamic range picture format. Device makers such as television, smartphone, PC and soundbar companies pay Dolby to build these technologies, and its audio codecs (which compress and decode sound), into their products. Dolby says about 1,000 manufacturers license its technology. Content creators and distributors use its tools to make and deliver films, shows, music and sports in these formats.

Licensing, covering branded technology and patents, brought in 93% of revenue in fiscal 2025. The rest came from products and services, such as Dolby Cinema and cinema equipment. By market, broadcast products such as televisions and set-top boxes made up 34% of licensing revenue, mobile 22%, consumer electronics 12% and PCs 12%. Dolby also gets fees for running patent pools, in which patent owners license their patents together.

Dolby depends on its intellectual property. As of September 26, 2025, it held approximately 28,400 issued and effective patents. The filing warns that the Dolby family and its affiliates may take actions in their own interests that other stockholders do not view as beneficial.

Its biggest risks, as it describes them

Changing ways people watch and listen to content, which could hurt demand for its technology.
The loss of a key licensee, since a small number of licensees can make up much of the revenue.
Reliance on device makers including them in products, and on technology standards that may choose rival technologies.
Licensees' royalty reports that can be late, inaccurate or understated, which makes revenue swing.
Protecting its patents and other IP, unauthorized use, and costly IP disputes.

From Dolby's annual report on Form 10-K, filed November 18, 2025, in our words; the 10-K has the full description and every risk factor. Updated with each new 10-K.

Charts show fiscal years, from the 10-K filings.

Revenue and margins

Revenue

US$ billions, fiscal years

Margins

Percent of revenue

GrossOperatingNetFree cash flow

Net income and earnings per share

From fiscal 2016 to 2025, earnings per share grew 4.2% a year and net income 3.6% a year, as buybacks cut the share count by 5%.

Net income

US$ billions, fiscal years; loss years in red.

Diluted earnings per share

US$ per share, fiscal years, restated for any stock splits; loss years in red.

Returns on capital

Return on capital and on equity

Percent. Return on capital is after-tax operating income over the money invested in the business (debt plus equity, minus cash); return on equity is net income over shareholders' equity. Both use the average of opening and closing balances.

Return on capitalReturn on equity

Cash flow

Free cash flow

US$ billions. Cash from operations minus capital expenditure; negative years in red.

Payouts and share count

Dividends and buybacks

US$ billions, cash paid in each fiscal year

DividendsShare buybacks

Diluted share count

Weighted-average diluted shares, millions

Valuation

Two ways to value Dolby yourself, both starting from its filings: a discounted cash flow model and the price-to-earnings method.

Discounted cash flow (DCF)

A discounted cash flow (DCF) model values a business as the cash it may generate in future, discounted back to today. The starting figures come from Dolby's 10-K (or, for net cash and shares, its latest 10-Q) and the assumptions are yours: start from one of three example scenarios, then change any figure to see what it implies for a share, and how that compares with the last share price.

Value per share on three example scenarios, from Dolby's fiscal 2025 free cash flow of $436M, net cash of $703M at September 26, 2025 and 98 million diluted shares, from its filings. The scenarios are fitted to Dolby: the base scenario's growth in years 1 to 5 is its revenue growth over the last 3 years, 2.5% a year; the cautious and optimistic ones are lower and higher, and growth in years 6 to 10 is halfway to the long-run rate. The base scenario's discount rate is 11%: 9% for a business of moderate risk (Application Software), plus 1 point as a smaller company, worth $6.0B, plus 1 point for unsteady results (revenue fell in two of the last five years); the cautious and optimistic ones use a point more and a point less. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

From the filings

Starting free cash flow, US$ millions

Cash from operations minus capital spending in fiscal 2025.

Net cash, US$ millions

Cash and short-term investments minus debt and finance leases at September 26, 2025. Negative means net debt.

Diluted shares, millions

Weighted-average diluted shares in fiscal 2025.

Your assumptions

Start from

Fitted to Dolby's own revenue growth, as above. Cautious: growth of 0.5% then 1% a year, 2% after year 10, a 12% discount rate. Base: growth of 2.5% then 2.5% a year, 2.5% after year 10, a 11% discount rate. Optimistic: growth of 4.5% then 4% a year, 3% after year 10, a 10% discount rate.

Free cash flow growth, years 1 to 5 (% a year)

Free cash flow growth, years 6 to 10 (% a year)

Growth after year 10 (% a year)Long-run growth forever after year 10. Usually close to inflation, and always below the discount rate.

Discount rate (% a year)The yearly return an investor wants for the risk. A higher rate gives a lower value.

Value per share on these assumptions

—

Last close, October 26, 2026: $63.08
Value on these assumptions, against the last close: —

Cash flows in years 1 to 10, valued today: —
Everything after year 10, valued today: —
Plus net cash: —
Share of value from after year 10: —

Projected free cash flow

US$ billions. Each column is one year's projected free cash flow, split into what it is worth today and the part removed by discounting.

Value todayRemoved by discounting

How the value changes with two assumptions

Value per share in US$, with the growth rates above. The highlighted cell matches the current assumptions.

How the model works. Free cash flow grows at the first rate for five years and the second rate for five more, and each year is discounted at the discount rate. Everything after year 10 is valued as year-10 cash flow × (1 + growth after year 10) ÷ (discount rate − growth after year 10), discounted back ten years. Net cash is added and the total is divided by diluted shares. The result depends entirely on the assumptions. It is not a forecast, a price target or a recommendation. The last close is the consolidated US closing price, from Databento.

Price-to-earnings (P/E) method

Another common way to value a company is to multiply its earnings per share by a price-to-earnings (P/E) multiple: the number of years of today's earnings an investor pays for a share. A higher multiple usually means investors expect earnings to grow. Choose a multiple, for example from similar companies, to see the value it gives.

Value per share on three example scenarios, from Dolby's earnings per share of $2.35 (over the last four quarters). Each grows earnings for a year at the cash flow scenarios' rates and applies a multiple to next year's earnings: 34×, the middle of Dolby's own P/E today, its peers' median and its sector's median (the Information Technology median) for the base scenario, 20% less and more for the cautious and optimistic ones. The price is brought back a year at 12%, 11% and 10%. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

Earnings per share, US$

Diluted earnings per share over the four quarters to June 26, 2026, from the 10-Qs and 10-K.

P/E multiple

P/E today is the last close divided by the latest earnings per share, the four quarters' where available. Peers: Guidewire Software, Bentley Systems.

Earnings growth in the years ahead (% a year) Starts at Dolby's revenue growth over the last 3 years, 2.5% a year, as the base scenario does.

Earnings per share in the years ahead, US$

Year 1Year 2Year 3Year 4Year 5

Type your own estimate for any year; the years after it carry on at the growth rate.

Apply the multiple to earnings

A multiple on a future year's earnings gives the price then, brought back to today at the discount rate below.

Discount rate (% a year) The yearly return an investor wants for the risk, as in the cash flow model.

Value per share today at this multiple

—

Last close, October 26, 2026: $63.08
Value at this multiple, against the last close: —
Dolby's P/E at the last close: 26.8×

Company	Last close	Earnings per share	P/E today
Guidewire SoftwareGWRE	$183.96	$1.63	112.9×
Bentley SystemsBSY	$39.84	$0.91	43.8×
DolbyDLB	$63.08	$2.35	26.8×

How the P/E method works. Value per share is earnings per share times the multiple. On a future year's earnings, that gives the price in that year, which is brought back to today at the discount rate: price ÷ (1 + discount rate) for each year ahead. It is quick and easy to compare across companies, but it ignores debt and cash, and earnings can swing with one-off gains and charges, so a multiple says most about steady, profitable businesses. Like the cash flow model, the result depends entirely on the assumptions you choose. It is not a forecast, a price target or a recommendation.

Balance sheet

Fiscal year end	FY21	FY22	FY23	FY24	FY25
Cash and short-term investments	1,264	809	884	482	703
Debt incl. finance leases	0	0	0	0	0
Net debt (negative means net cash)	−1,264	−809	−884	−482	−703
Net debt to EBITDA	−2.9x	−2.7x	−3.0x	−1.4x	−2.0x
Debt to equity	0.0x	0.0x	0.0x	0.0x	0.0x
Interest coverage	719.0x	524.4x	—	—	—
Current ratio	5.6x	4.7x	3.5x	2.9x	3.2x
Quick ratio	5.5x	4.6x	3.4x	2.8x	3.1x

US$ millions unless stated, at each fiscal year end. Net debt to EBITDA is debt minus cash, divided by operating income before depreciation and amortization: roughly how many years of those earnings the net debt equals. Debt to equity is debt as a multiple of shareholders' equity. Interest coverage is operating income divided by interest expense. The current ratio is current assets over current liabilities; the quick ratio leaves out inventory.

Insider trades

Over the 12 months between October 27, 2025 and October 26, 2026, no insider bought Dolby shares on the open market, and 9 insiders sold $14.2 million, $12.4 million of it under trading plans set up in advance.

Date	Insider	Trade	Shares	Price	Value	Filing
Sep 1, 2026	John D CoulingSVP, Entertainment	Sold plan	7,667	$61.05	$468,070	Form 4
Aug 25, 2026	Ryan NicholsonVP, CAO and Corp. Controller	Sold	1,183	$65.28	$77,226	Form 4
Aug 14, 2026	Shriram RevankarSVP, Advanced Technology Group	Sold plan	3,000	$62.71	$188,130	Form 4
Aug 10, 2026	Ryan NicholsonVP, CAO and Corp. Controller	Sold	1,348	$62.04	$83,630	Form 4
Aug 4, 2026	Ryan NicholsonVP, CAO and Corp. Controller	Sold	357	$60.63	$21,645	Form 4
Aug 3, 2026	John D CoulingSVP, Entertainment	Sold plan	7,667	$60.00	$460,018	Form 4
Jul 1, 2026	John D CoulingSVP, Entertainment	Sold plan	7,667	$53.20	$407,884	Form 4
Jun 1, 2026	John D CoulingSVP, Entertainment	Sold plan	7,666	$55.63	$426,442	Form 4
May 22, 2026	Todd PendletonSVP, Chief Marketing Officer	Sold	11,876	$54.55	$647,836	Form 4
May 15, 2026	Shriram RevankarSVP, Advanced Technology Group	Sold plan	3,000	$54.90	$164,700	Form 4
May 12, 2026	Robert J ParkSVP & Chief Financial Officer	Sold plan	4,895	$56.68	$277,440	Form 4
May 5, 2026	John D CoulingSVP, Entertainment	Sold plan	7,666	$57.55	$441,207	Form 4

The latest 12 of 28 trades. Open-market purchases and sales by officers, directors and 10% owners, from their Form 4 filings with the SEC: one row per person, day and filing, at the day's average price. Grants, option exercises and shares withheld for tax aren't counted. Insiders buy and sell for many reasons, such as taxes, spreading their savings or a plan set up months earlier, so a trade on its own says little about where a company is heading. For information only, not investment advice. Insider trades at all companies

Piotroski F-score

The F-score counts how many of nine simple tests of profitability, funding and efficiency a company passed in a year (Piotroski, 2000). The more tests passed, the stronger the year: 8 or 9 is strong, 0 to 2 weak. Companies that report no gross profit are scored on the other eight.

Test	FY23	FY24	FY25
Net income is positive	Pass	Pass	Pass
Cash from operations is positive	Pass	Pass	Pass
Return on assets rose	Pass	Pass	Fail
Cash from operations exceeds net income	Pass	Pass	Pass
Debt fell relative to assets	Fail	Fail	Fail
Current ratio rose	Fail	Fail	Pass
Share count didn't rise	Pass	Pass	Fail
Gross margin rose	Fail	Pass	Fail
Revenue rose relative to assets	Pass	Fail	Pass
F-score	6 of 9	6 of 9	5 of 9
Accruals ratio	−5.9%	−2.1%	−6.8%

The accruals ratio is net income minus cash from operations, over average total assets.

Compare

Put Dolby side by side with any other company we cover: revenue, growth, margins, cash flow and returns, with ten years of charts.

Similar companies

Company	Year	Revenue growth	Operating margin	Free cash flow margin	Return on capital	Net debt to EBITDA	F-score	Compare
Dolby	FY25	5.9%	19.6%	32.3%	11.4%	−2.0x	5
Zeta Global	FY25	29.7%	0.4%	14.2%	0.7%	−1.6x	5	Compare
Klaviyo	FY25	31.6%	−5.5%	16.9%	—	—	—	Compare
Guidewire Software	FY26	22.7%	10.2%	25.6%	12.1%	−0.4x	8	Compare
Bentley Systems	FY25	11.0%	24.1%	34.6%	12.3%	2.8x	9	Compare

Each company's latest fiscal year. Fiscal years end in different months, so the periods don't line up exactly. Free cash flow margin is free cash flow as a share of revenue. Net debt to EBITDA is explained under the balance sheet, and the F-score above.

10 years of figures

Fiscal year	FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	FY24	FY25
Income statement
Revenue	1,026	1,080	1,055	1,242	1,162	1,281	1,254	1,300	1,274	1,349
Revenue growth	5.7%	5.3%	−2.4%	17.7%	−6.4%	10.3%	−2.1%	3.7%	−2.0%	5.9%
Gross profit	917	962	927	1,081	1,015	1,151	1,112	1,147	1,133	1,189
Research and development	220	233	237	238	239	254	261	272	264	262
Operating income	232	247	184	257	219	344	207	216	258	265
Net income	186	206	42	255	231	310	184	201	262	255
Diluted EPS (US$)	1.81	2.00	0.39	2.44	2.25	2.97	1.81	2.05	2.69	2.62
Diluted shares (millions)	102	103	107	105	103	105	102	98	97	98
Cash flow
Cash from operations	360	378	352	328	344	448	319	367	327	472
Capital expenditure	101	100	73	96	66	54	48	30	30	36
Free cash flow	259	278	279	231	278	393	271	337	297	436
Dividends paid	48	57	66	78	89	89	100	103	115	127
Share buybacks	101	100	150	341	174	246	530	149	160	125
Acquisitions	0	0	23	15	0	4	38	26	488	1
Stock-based compensation	67	65	71	77	87	100	115	118	120	128
Balance sheet at fiscal year end
Cash and short-term investments	641	882	1,096	916	1,119	1,264	809	884	482	703
Debt incl. finance leases	0	0	0	0	0	0	0	0	0	0
Total assets	2,310	2,534	2,865	2,822	2,917	3,106	2,690	2,980	3,110	3,228
Total liabilities	331	390	495	509	479	502	438	608	623	596
Shareholders' equity	1,970	2,137	2,364	2,307	2,433	2,598	2,246	2,355	2,477	2,623
Margins and ratios
Gross margin	89.4%	89.0%	87.9%	87.0%	87.4%	89.8%	88.7%	88.3%	89.0%	88.1%
Operating margin	22.6%	22.9%	17.4%	20.7%	18.8%	26.9%	16.5%	16.6%	20.3%	19.6%
Net margin	18.1%	19.1%	4.0%	20.6%	19.9%	24.2%	14.7%	15.4%	20.6%	18.9%
Free cash flow margin	25.3%	25.8%	26.5%	18.6%	23.9%	30.7%	21.6%	25.9%	23.3%	32.3%
Return on capital	13.4%	12.9%	6.6%	17.4%	15.6%	23.2%	12.7%	11.9%	12.5%	11.4%
Return on equity	9.8%	10.1%	1.9%	10.9%	9.8%	12.3%	7.6%	8.7%	10.8%	10.0%
Return on assets	8.4%	8.5%	1.6%	9.0%	8.1%	10.3%	6.3%	7.1%	8.6%	8.1%
Net debt to EBITDA	−2.0x	−2.7x	−4.1x	−2.7x	−3.6x	−2.9x	−2.7x	−3.0x	−1.4x	−2.0x

US$ millions unless stated. Where a later 10-K restated a year, the latest filed figure is shown. Download all figures (CSV, US$ millions)

Source: Dolby's Form 10-K filings, from SEC EDGAR. For information only, not investment advice. The Filing Desk is not affiliated with Dolby.