Dolby Laboratories, Inc. (DLB) Earnings Call Transcript & Summary

And we're live. Let's get started. So hi, good afternoon, everyone, and welcome to our first virtual TMC Conference. My name is Paul Chung. I'm very happy to have here with me, Lewis Chew, CFO of Dolby Labs. So I'll begin this fireside virtual chat, and then we can have people ask questions and type them into the Q&A feature, and then we'll get to them if we can. So well, well, hello, Lewis, welcome.

Paul, I assume that you are the Paul Chung, right, like the Paul Chung that you...

Can you hear me okay?

Yes.

Hold on.

Paul, can you hear me?

Can hear you, me?

I can hear you, yes.

Okay, okay. I got it. I can hear you now. So sorry about that. So let's jump right into your segments.

Paul, just that's so funny after we were joking around about the hedge funds.

I know.

The long run of it must have gone dead. But anyway, more of our earnings. I was just saying that your intro, you should be the Paul Chung. So anyway...

All right. So let's just jump right into the segments. Let's make the best use of your time and everyone's time. So let's start with the soundbars, DMAs, DVD players, et cetera. Which technologies do you guys offer? What are the kind of penetration rates? Where do you see the most upside? And then is there any kind of different pricing on ASPs there?

Okay. In keeping with your tradition, Paul, you always have these multilayered questions on the earnings call, so that's good. Actually, soundbar is an interesting one because soundbar is an area that we've seen growing the last several years. That's a really good illustration of the kind of value that we add because for those of you listening in who have not experienced a soundbar, it's actually a pretty amazing invention because Dolby is all about making this immersive audio experience better, right? I mean we invented the surround sound. And a soundbar takes a single speaker and makes it appear as if the sound is coming from all around you, and there's a lot of engineering and cool wizardry that goes into that. So yes, soundbar is a great space for us. Our latest audio technology known as Dolby Atmos, which is sort of a 3D sound, it allows you to put sound all around you, is a great place where we have soundbars. And I know earlier this week, I saw that Sonos, Sonos released their latest soundbar, I think it's called the Arc, which features Dolby Atmos. So it's always really cool to see leading-edge companies like that come out with a cool new product featuring our technology. Of course, they're not alone. There are other prominent soundbars with us designed in there. You mentioned DMAs. DMAs, I refer to DMAs as your Apple TVs, your Fire TVs. Yes, I think soundbar, DMAs, those are an area of growth for us, not only because units are growing in that sector, Paul, but also because our adoption is going higher. So that's the best of both worlds, where you can get more adoption into an area that secularly is growing. And then, broadly, amongst consumer electronics, we also are featured to things like ADRs and as home stereo equipment. Then beyond, I mean, in our category called consumer electronics, we don't include that, but also gaining modules. And of course, TVs, set-top boxes, there's pretty broad array of things that the Dolby technology can go into. And of course, our prime objective is to be featured in more and more of those devices with some of these cool technologies.

If we can expand on kind of the DMAs in terms of content. Last -- in the last year, you added Disney+ content, Apple TV+ at standard pricing and SHOWTIME, CBS will feature Dolby Vision content. Can you just talk about why these streaming services, why they're providing in Dolby Vision? And Atmos or -- and what -- what's the use case that's really attracting these streaming services to adopt your technology?

Yes. I think it starts first with, I'd love to use the phrase, kickass technology, but it really does -- it does make the experience a lot better. If you happen to be able to watch content in Dolby Atmos and/or Vision, you're getting more immersive sound, better picture, better contrast ratio, color saturation. And so yes, it's very encouraging and very satisfying for us to see these really big-name players adopt the Dolby technology in their streaming services because that really helps with our whole ecosystem, because our ecosystem starts with people who create the content, then it involves broadcasters and distributors like streaming services and then ultimately, you or I consume that content on either a laptop or a TV or a mobile phone. So when we see big services like Amazon Prime or Disney+ or Apple TV+ adopt Dolby Atmos and/or Dolby Vision in their content, that's a really strong statement about the quality of that because I think these are services that you would have to argue are preeminent services that quality certainly matters, and I think we're synonymous for that. So I think what that does is when we get that content flowing is what encourages the whole ecosystem to then adopt our technology more, either in the content or in the end devices and become sort of our virtuous cycle, where everywhere along the chain, the different key players are adopting Dolby technology, which then allows our penetration in the devices we are talking about to grow, which is what our revenue model is, is to penetrate, grow, adoption and unit volume.

Got you. And then we're just hopping around here, but at CES, beside some of these streaming experiences we were saying, we saw the Amazon Studio experience for kind of the smart speaker, your first foray there. What is that? And why is it important? And in terms of the music streaming side, why is it important?

Yes. In fact, that Amazon Echo Studio was important in a couple of ways because for a while now, the smart speaker segment has been a growing segment. And for the most part, you didn't see a lot of Dolby presence there. And with that announcement, a couple of things happened. One, it was a very prominent example of a major player adopting Dolby Atmos in a smart speaker, which is a big, important market. And two, it also was cojoined with us, effectively launching Dolby Atmos for music. Now why is that important? It's important because over the last many, many years, most of Dolby audio and, of course, Dolby Vision technology has been applied to video-based content: movies; TV shows; live sports. And we've really not had a large voice in music. But with the launch of that Amazon Echo Studio came with it some pretty prominent music that was mastered in at Dolby Atmos, which then has the benefit of making that music sound more lifelike, more enriching, more moving, which is what artist want their material to do to people. So it is pretty cool because we do feel like music is a big area of content that, even a year ago, we weren't addressing. But now that we are, makes us more relevant. It makes us more relevant to streaming services. It makes us more relevant to devices to adopt us into their technologies. It's just another way for us to be -- to add value to people the way they experience their content, whether it be a movie or a TV show or now music or live sports. We want to make all those experiences better. If it has sound, it has video, we want to make it sound better and make it look better.

So how does that kind of anchor product gets you into expand across the smart speaker ecosystem?

Yes. So I think it's -- I'll talk about smart speakers first and maybe expand beyond that. But the smart speaker, and I'm no expert on smart speakers, by the way, I don't even use one myself, which is probably a bad thing to admit in public form, but they started off as being something pretty basic for functionality. Alexa, what's the traffic like? Or what's the weather like today? Or check the stock price. But I think what we've seen in that place is that smart speakers evolve to become much more integral and do a lot more things to the point where this smart speaker is one that you might actually listen to music on, not just do commands to find out what the weather is like. And that's where we definitely want to be relevant because I don't think that Dolby tries to say that we make a command sound better if you're asking for a weather check. But if you're playing music on your speaker, we want to be there. But it goes beyond the smart speaker because, obviously, the smart speaker itself is something that we want Dolby technology to be in, but then also things like mobile phones. A lot of people still use their mobile phones to listen to music, whether they be walking around or jogging or riding on mass transit somewhere. And so Dolby Atmos for music increases our relevance to that because, today, Paul, as you know, because you track us, there are many times where the Dolby technology is adopted more at the premium end of the spectrum. But our strategy and our objective is to be adopted widely through the whole breadth of devices. So something like Dolby Atmos for music makes us more relevant to a broader array of phones. So it doesn't have to be a top end, high-end smartphone. It could be a medium- or lower-end phone where the consumer is using it to listen to music, and that music can sound better in Dolby Atmos. So really, it's smart speakers, it's phones. It's other devices that Dolby Atmos for music addresses that makes us, hopefully, add more value to that ecosystem that we're trying to address.

Got you. So let's move on to PC. So you had this nice work-from-home benefit in the last quarter, and you're starting to see that across the whole PC kind of in notebooks more so. You already have a great relationship with Apple, but there's other pockets of growth there possibly. Can you elaborate on kind of how the PC pricing evolved over time with the optical disk drive and where you are now? And how does the ASPs kind of function in the future? And is there more kind of OEM market share to gain there?

Yes. PC has been a very interesting market segment to talk about for Dolby because there was a point in our history, before I joined the company, where PC was providing a large portion of the growth as we were being adopted, like you said, in disk drives going into PCs. But over the last 5 years, there's been sort of this declining secular trend in PCs, as people talked about them being replaced by tablets or moving away from PCs. But I think now, there's almost like a resurgence, like a leveling out. And in that time frame where we've faced all of our headwinds in PCs and dealt with that, when we used to get the multiple royalties per unit that's all gone away, now what we see in the PC market is potential resurgence in terms of opportunity for Dolby. Why is that? Because your basic PC today might have just Dolby Digital Plus on it, which is a core anchor technology that Dolby offers, but is not necessarily the most leading edge in terms of experience. But in the last year or 2, we've seen a couple of PC manufacturers adopt Dolby Vision and Atmos for their PC. Why is that? Because you and I and our kids and our friends are using PCs for more than just computing. They're using that to do video conferences like this. They're using it to consume content. Both of my kids, my kids are older than yours, obviously, one is 27 and one is 22, but they both watch TV on their laptop. They watch Netflix and things like that. So we are really encouraged, and I think we're optimistic about the ability to get things like Dolby Vision and Dolby Atmos embedded into PCs. What that means then is PC, even though for the last few years, on a secular basis, it might not have been viewed as a growth market, for us, I think now we're at the point where PC is a growth opportunity for Dolby because Dolby Vision and Dolby Atmos are incredibly relevant to PCs. And as PCs continue to innovate and try to make themselves more relevant to consumers, I think that, that's a great opportunity for us to go after and try to get more adoption. And we see that. Lenovo is one of the earlier adopters. There's a couple of Lenovo models out there where you experience one of these PCs that are in Atmos or Vision. It just blows you away. I mean, the first thing you think is they must be trying to trick me. There's no way this much sound could be coming out of a PC. But ultimately, it works. The technology is getting more and more advanced. So yes, PC as a market. Today it's probably about low teens in terms of our revenue percentage. It used to be over 30%, and it had been shrinking for a number of years. Certainly, all the years you've been covering us, it's been shrinking. But now we see it sort of leveling out and potentially being back on a growth path in the future, hopefully, if we can get this adoption.

And then the gaming side, we'll get to that later. But there's some upside there on the PCs, but we'll get to that segment later. Let's move on to your largest segment, Broadcast. What is the kind of penetration rate on audio, vision as well? And then where do you see kind of vision market share, how that evolves over time, where it taps out? And then we can kind of get into the competitive environment there.

Broadcast is our largest end market segment that we address, as you said. It rattles between, call it, 40% and 45% of our licensing revenue every quarters typically in Broadcast. And it's a relative easy sector to describe because that's where we classify all the revenue we get from TVs and set-top boxes, where TV is a little bit more heavily weighted than set-top box just because there's more consistent purchases of that. I would say that, historically, we have enjoyed very high penetration of our audio technology in both TVs and set-top box. So things like Dolby Digital and Dolby Digital Plus, you think of penetration rates going above 50%. It's still earlier days, though, for Dolby Vision and Dolby Atmos. For Dolby Vision in TVs, for example, last year, at the end of FY '19, we said that we figured that for FY '19, Dolby Vision was in about 10% of the 4K TVs out there. We anticipate, and that's even with the whole COVID-19 shutdown phenomenon that, that penetration rate will grow noticeably in FY '20. And we'll wait until the end of the year to come out with whatever the new number is. But even at that, even if it grows significantly from the 10% on up, you can see that there's a lot more room to grow. And one of the things that we're focused on is something I mentioned earlier, which is there are some customers where we tend to have Dolby Vision more at the premium level of TV, but we think it's applicable all the way down the line because it can actually make a lower-end TV look a lot better as well. And now that the content is being streamed, as you said, through Apple TV+, Disney TV, Disney+ and Netflix and all that, there's no reason why only high-end TVs can do that. And then set-top box, set-top box is probably one of the more interesting marketplaces we address because I think, secularly, set-top box is not viewed as a growth market for the obvious reason, cord-cutting and things like that. Here at Dolby, you already mentioned DMAs, our strategy is to be relevant to whatever device you're getting your content through, whether it's a set-top box or a DMA. But the one thing I should point out is that the whole TAM of set-top box that we address today, virtually none of it is using Dolby Vision yet because Dolby Vision is still a relatively new technology. So there are a couple of set-top boxes out there that have been announced or displayed in public, but for the most part, we're not enjoying yet revenue from vision in set-top boxes. So over the near-term to medium-term horizon, that could be a growth vector for us, Paul, is getting vision adopted into set-top boxes, so that even if unit volume is in a declining secular trend, the adoption of Dolby Vision into set-top boxes could become a thing. And I think there's any number of factors that could help encourage that. One of those might be live sports. As you know, live sports is still a domain that is dominated by Broadcast TV. And right now, there is no live sports yet being broadcast in Dolby Vision, but we've been working on trials and things like that. So I have no reason to believe that sometime in the future that you wouldn't see live sports in Dolby Vision. I can't say when, and I don't know exactly the things that I would point to that get us there, but these things are almost like natural evolution of events that will occur, just like Dolby Audio surround sound, eventually was applied to all HD and live sports as well. So I think set-top box has some opportunity for growth of adoption there. So I think Broadcast is one of our bread and butter markets we serve, very important to us. Obviously, TV is the big focus right now to get Dolby Vision adopted through the chain and for things like set-top box. Notwithstanding any secular unit volume pressures, we would like to see Dolby Vision adopted more broadly by Pay TV providers, so that gives us some offset against that headwind.

Got you. And how big is the threat of HDR10+ from your perspective? Just want to hear about your view on the specs relative to Dolby Vision. And who went down in the end? Or can you both live harmoniously?

Well, we're both living harmoniously now. So for the audience, HDR10+ is the HDR, the high dynamic range standard that is promoted by Samsung. It's an in-house technology that they created, that they make available for the environment. I think I almost wish you could speak to all the content providers because it appears to me, and of course, I'm never objective on these statements, somewhat biased towards Dolby, that's where I work. But it appears to me like we have pretty strong footing in the creative community in terms of movies and shows, and that's where it tends to begin. And now we've added onset, the leg that includes all the streaming services like you said. And then finally, in terms of TVs, you're talking about nearly every major TV manufacturer has at least one model of Dolby Vision in it. So I think we can't waste a lot of -- we can't cry a lot of tears about the fact that Samsung has their own standards. Samsung is a very important and very valuable customer to us, and they use a lot of our great technology. And it just so happens that they have this competing standard, and I'm hopeful someday that they will adopt Dolby Vision. Dolby Vision is a very compelling technology, and it is offered at very, I believe, very fair and reasonable royalty rate, if not at all. We're very benevolent in that sense, so I think we make it easy for customers to adopt it broadly. So there you go. Like I said, we do coexist today. There are any number of TVs that actually have both HDR 10 and Dolby Vision on it, so that the consumer doesn't end up finding out the hard way that they couldn't get one without the other. And we've purposefully tried to make that not a point of friction so far. And I think -- so going forward, our focus is on making Dolby Vision as good as it can be in getting lots of content out there and get it adopted by folks. And hopefully, there will come a time when Samsung will decide to maybe adopt that into their lineup as well.

And you mentioned one model of Dolby -- every OEM has at least one model with Dolby Vision. What is -- why aren't they just kind of deploying it across their whole SKU lineup? What's stopping them from doing that besides the cost?

Yes. Well, first of all, there are differing levels. So there are some companies like VIZIO, where they have adopted Dolby Vision more broadly through their lineups. And then there's other companies like, say, LG, which LG is an incredibly successful company in the TV market where they have adopted Dolby Vision more at the higher end. Each company is different. I'd say the most common reason for a company that hasn't adopted it more broadly, I would argue, is not cost. It's more the notion that Dolby Vision could be still construed as just a premium offering because, like anything, when you come out with something new, it's considered premium. I mean there was a time you may remember when a color phone was like premium and a black and white phone was plain. And over time, that becomes a no big deal or maybe initially the phone that has a thumbprint on it is considered premium. But eventually, it flows down hill. So we tend to think of Dolby Vision as no different from a lot of things in a world that when it first comes out, it's awesome, it's cool, it's premium, but over time, you want it to be more ubiquitous. One of the examples I used this morning in one of my buy-side meetings was there was a time when I'm sure it was a premium to have a backup camera on your car. Like only the high-end cars had a backup camera, but there's going to come a day when it's going to be mandated. What they're going to say, "Hey. Why should not every car have a backup camera, so you don't accidentally run into somebody in a parking lot or something like that?" So I think Dolby Vision -- yes. So Dolby Vision, as well as those technologies, where we love the fact that it's viewed as a premium experience. We want the premium experience to be available to as many people as possible. And certainly, the number of services that are now offering and streaming content at Dolby Vision suggests more that it's something for the masses, not just for premium. I think you mentioned earlier on that some of the services have it embedded in their basic baseline service. And then you want to talk about companies like Apple where their most phone release, this model SE, is a more -- let's call it a more affordable phone, I guess, in Apple speak. That has Dolby Vision in it. So I think you're seeing some signs that as vision starts to become not just this novel thing that's just for the cool high-end device, that our objective and our vision is for vision to be more broadly adopted. So I think these TV manufacturers have different ways of tiering their products, and some of them are still looking at it as a premium offering, and that may be the one thing preventing them.

Let's go back to set-top boxes. So you got some pressures on cord-cutting and things like that. But emerging markets, you mentioned, are big opportunity there. Which regions? And why do you see that opportunity?

I'd say any of the regions where you see broad masses of consumers, where there's not been a broad-scale rollout yet of either digital broadcast and/or HD broadcast, are prime opportunities for us because not -- the entire world has not caught up to places like America or Europe or China in terms of quality. So I think, even areas like big -- large areas like India would be an example where if there were any broadscale rollouts, we want to be the one that's part of that equation. We can't anticipate when it will happen, but if and when it happens, we want Dolby to be the standard that's adopted, which is why, yes, I think cord-cutting is a phenomenon that I'm not going to deny isn't out there. But there are parts of the world where they're still earlier on in that cycle, and there could be some more broadcast-type services rolled, Pay TV type services rolled out. And if they are, we want Dolby to be the solution. So we do see that as a growth driver, but it's harder to pinpoint, Paul, how to influence that directly on a quarter-to-quarter basis. It's more of a longer haul. But the reality being that Dolby's audio technology is, I think, the preeminent solution that's out there, so to the extent that there is that rollout, we want to be the one that they pick.

Okay. Great. Mobile, can you remind us who have adopted Atmos on mobile. And also vision, you mentioned Apple and, I believe, Lenovo. But where are we in terms of penetration? And where does that go?

Yes. I'd say the 2 biggest names in the mobile phone industry, it's easiest to talk about them first. For Apple, Apple has adopted Dolby Vision and Atmos on their iOS system. So -- in fact, and now with the SE, they've adopted it on the SE model as well. So we're broadly featured there. On the Samsung side, Samsung has adopted Atmos for their higher-end phones to Galaxy, but they've not adopted Vision, and that's very probably a similar contextual conversation.

Can you just talked about...

Yes. It's the same contextual conversation is what we had about TVs. And then you have everyone else, and then we have sort of 1 Z, 2 Zs examples of the OPPOs and the Sonys and the Sharps, where, to varying degrees, they've adopted either Vision and/or Atmos or both. What we do see is an opportunity, this broad set of customers, not called Apple and Samsung, they still make up a pretty large chunk of units volume per year that we would like to get adopted on. So that's part of our effort is try to get more penetration broadly across those. But for the bigger players, obviously, I've already mentioned it a dozen times now, they're going to start feeling like I'm appealing to them on air, but we'd love to see Samsung someday adopt Vision, which would open up potentially an opportunity in both the TVs and the phones because that's fundamentally a vision -- a video technology.

Okay. Let's move on to cinema, which has kind of been hit the hardest by COVID. So where do you think the cinema business kind of emerges post COVID? And then kind of where are these the potential for partnerships with some of the bigger players in the U.S., like Cinemark and Regal? Where do we stand there?

Well, our current largest partner -- our largest partner today is AMC, and that's the largest share. Dolby Cinema is the thing you're probably referring to. Dolby Cinema, we have about 250 screens worldwide, of which more than half of those are in the U.S. COVID-19 has clearly affected that industry significantly, and you saw that reflected in the comments I made about Q3 guidance where I basically signaled that we're essentially not really expecting much of any revenues from Dolby Cinema in the quarter. And then the equipment that we sell into the cinema industry, we're expecting very, very little this quarter as well. I think you asked a pretty big question that I don't have an answer to yet, which is what happens after this first wave of COVID-19. Like when we actually start getting to return back to work, do all the cinemas open back up? Do they start buying equipment? I think we're going to have to monitor that. I don't know that I have some sort of insightful observation right now, other than to say that we do have to watch that one and watch it carefully because it is an industry that relies on people getting together in big gatherings. And if there are some more permanent measures put in place for things like social distancing, that could affect the amount of revenue we can get from that space. But I am happy to say that we're relevant to that space, and it's not such a big part of the company that it has any debilitating effects on us. As you well know, products and services only make up roughly 10% of the company in total and even a lesser part of the profits there. So if we have to pivot and make changes, then we'll do that at the appropriate time. But for right now, I think it's sort of a wait and see. It's still too early to tell. It's too early to know what's really going to happen. There's a lot of big players in that space whose entire business depends on that, so we'll look for queues from them before we do anything drastic.

Okay. Quickly on gaming, there's a surge in gaming demand on work from home. There might be a better benefit for you guys on console upgrades. But what are the opportunities in gaming for Dolby?

Yes.

And headset, I guess, adoption, right?

So yes, the -- for gaming, the console space is our primary focus with the objective being, can we get Dolby Atmos and Dolby Vision adopted by gaming consoles ubiquitously. And today, it's a little bit of a triopoly, or whatever is the 3-way version of a duopoly between Xbox and PlayStation and the Nintendo series. So yes, so we have an upcoming -- we think we have an upcoming cycle of consoles coming this fall based on what previous announcements were made. So we'll be looking to try to get our technology penetrated in those devices, and that will be -- that will come out when it comes out. And then it's a matter of units after that. But then if I go one step beyond that, when we were talking earlier about content and how we keep ourselves relevant by being in content, PC is also another device that's used for a lot of gaming. And you may have seen in Kevin's comments that the latest Call of Duty title that went out, 50 million users in 1 week or 50 million purchases in 1 week or whatever the stat was, that was a game that I believe was also formatted for the PC. So this goes back to my argument of Dolby Vision and Dolby Atmos becoming relevant for so many devices. But very quietly, the PC becomes a very prime target to go after because now, not only are we talking about people streaming things, like Disney+ or Apple TV or Netflix to their PC, but also playing games on it. And that's where Dolby Vision and Dolby Atmos can really enhance the quality of that experience. So yes, gaming is an important area for us. It's probably an area where we have less content to brag about, but it's really cool to point out a really -- almost like industry-leading franchise like Call of Duty. It's got to be one of the top, if not the most valuable franchise out there in terms of gaming. To be adopting our technology is a huge positive statement for our technology because that doesn't come lightly. People don't do that randomly. I mean that's taken very seriously when people do that.

Got you. Auto is a smaller segment, but it hasn't really been material prior to COVID, probably even less so now. But what is your vision for auto in terms of audio, at least more? Any comments you have on auto?

Well, I can confirm we're not making backup cameras. Right about now, Paul, this audience is thinking, what, what's he talking about backup cameras? They don't know where the jokes are at, so I'm just tying back to a comment I made earlier about backup cameras. So the auto sector has been interesting for us because the bulk of our revenue today from auto still comes from backseat entertainment systems that play a DVD. But going forward, I'm going to now tie back to some earlier comments I made about Dolby Atmos for music. The automobile is still an area where people enjoy a lot of their music. So when we released Dolby Atmos for music, we were trying to make ourselves relevant to that kind of a market because the automobile market is an attractive market, right? You're talking about tens of millions of units sold per year, and it tends to be a very sticky market in the sense that when you get in there, you -- there's this notion that you stay in there because the design cycles are so long. And so yes, I would say the automobile sector is now, today, I would say, incrementally more relevant to us than it was a year ago because Dolby Music has opened up a new avenue of conversation about whether or not we could get things like Dolby Atmos into a car, so that now you're in your car, listening to a streaming service that has Dolby Music and Atmos, you can hear that in your car and make that experience better. So yes, the automobile is a sector that is one of our target areas. It probably isn't necessarily today as large of a focus as gaming or TVs or PC but certainly one that is attractive to us.

Okay. We only have a minute left, but I'll just take some questions here. Price increases, is there any kind of capability for price inflation on the royalty rate that you provide across products?

Typically, our pricing strategies are fairly stable. We're not -- we don't pursue a strategy where we seek to -- I mean, I will -- it's obvious that when you come out with a new product, that may be at the higher end of the scale. But over time, we tend to try to keep our pricing fairly stable.

Okay. And then last quick question, where kind of the new product development, which kind of innovations are you most excited about? Where is all the R&D going?

Well, I wouldn't call it all the R&D, but the one topic you didn't ask me about that I want to take one second on is we are focused on making Dolby technology available to all the content that's out there in the world that's not produced by a studio. And so even if you look on our website today, there's a thing called Dolby.io, which is a developer platform that we've launched to allow developers to use APIs from Dolby to embed Dolby technology into their apps. So that -- I think that is a further conversation, but that is an area we see as potential growth for the longer term.

Okay. Great. Thank you so much, Lewis. Appreciate it.

Okay, Paul. Thank you.

All right.