Operating margins exhibit significant volatility, swinging from 9.7% in 2025Q4 to 29.1% in 2026Q2, reflecting the high operating leverage inherent in the company's R&D-heavy cost structure.
| Metric | TTM | Sep'25 | Sep'24 | Sep'23 | Sep'22 | Sep'21 | Sep'20 | Sep'19 | Sep'18 | Sep'17 | Sep'16 | Sep'15 | Sep'14 | Sep'13 | Sep'12 | Sep'11 | Sep'10 | Sep'09 | Sep'08 | Sep'07 | Sep'06 | Sep'05 | Sep'04 | Sep'03 |
|---|
| Sales/Revenue | 1.36B | 1.35B | 1.27B | 1.3B | 1.25B | 1.28B | 1.16B | 1.24B | 1.05B | 1.08B | 1.03B | 970.64M | 960.18M | 909.67M | 926.26M | 955.5M | 922.71M | 719.5M | 640.23M | 482.03M | 391.54M | 327.97M | 289.04M | 217.47M |
| Revenue Growth % | 3.39% | 5.92% | -2% | 3.67% | -2.14% | 10.28% | -6.43% | 17.73% | -2.48% | 5.43% | 5.68% | 1.09% | 5.55% | -1.79% | -3.06% | 3.55% | 28.24% | 12.38% | 32.82% | 23.11% | 19.38% | 13.47% | 32.91% | - |
| Cost of Goods Sold | 171.46M | 160.13M | 140.5M | 152.57M | 141.36M | 130.03M | 146.5M | 160.85M | 127.56M | 118.31M | 108.98M | 94.82M | 70.18M | 96.72M | 92.03M | 111.17M | 122.22M | 84.81M | 67.78M | 74.27M | 76.04M | 80.22M | 91.5M | 73.64M |
| COGS % of Revenue | - | 11.87% | 11.03% | 11.74% | 11.27% | 10.15% | 12.61% | 12.96% | 12.1% | 10.94% | 10.62% | 9.77% | 7.31% | 10.63% | 9.94% | 11.63% | 13.25% | 11.79% | 10.59% | 15.41% | 19.42% | 24.46% | 31.66% | 33.86% |
| Gross Profit | 1.19B | 1.19B | 1.13B | 1.15B | 1.11B | 1.15B | 1.02B | 1.08B | 927.04M | 963.15M | 916.76M | 875.82M | 890M | 812.96M | 834.24M | 844.33M | 800.49M | 634.69M | 572.45M | 407.76M | 315.5M | 247.75M | 197.54M | 143.83M |
| Gross Margin % | 87.44% | 88.13% | 88.97% | 88.26% | 88.73% | 89.85% | 87.39% | 87.04% | 87.9% | 89.06% | 89.38% | 90.23% | 92.69% | 89.37% | 90.06% | 88.37% | 86.75% | 88.21% | 89.41% | 84.59% | 80.58% | 75.54% | 68.34% | 66.14% |
| Gross Profit Growth % | - | 4.92% | -1.22% | 3.12% | -3.37% | 13.39% | -6.06% | 16.58% | -3.75% | 5.06% | 4.67% | -1.59% | 9.48% | -2.55% | -1.2% | 5.48% | 26.12% | 10.87% | 40.39% | 29.24% | 27.35% | 25.42% | 37.34% | - |
| Operating Expenses | 938.84M | 924.04M | 868.51M | 884.36M | 895.21M | 810.47M | 794.73M | 787.13M | 743.98M | 701.66M | 683.73M | 662.27M | 613.88M | 561.82M | 471.05M | 411.19M | 354.49M | 292.2M | 286.17M | 222.91M | 189.54M | 165.69M | 129.94M | 94.85M |
| OpEx % of Revenue | - | 68.49% | 68.19% | 68.04% | 71.4% | 63.26% | 68.41% | 63.4% | 70.55% | 64.88% | 66.66% | 68.23% | 63.93% | 61.76% | 50.86% | 43.03% | 38.42% | 40.61% | 44.7% | 46.24% | 48.41% | 50.52% | 44.95% | 43.62% |
| Selling, General & Admin | 656.62M | 647.24M | 604.85M | 612.84M | 634.03M | 556.83M | 555.69M | 549.26M | 507.19M | 468.35M | 464.12M | 460.95M | 430.75M | 393.07M | 330.91M | 287.27M | 249.51M | 225.49M | 224.09M | 178.8M | 154.16M | 135.16M | 106.46M | 76.59M |
| SG&A % of Revenue | - | 47.97% | 47.49% | 47.15% | 50.57% | 43.46% | 47.83% | 44.24% | 48.09% | 43.31% | 45.25% | 47.49% | 44.86% | 43.21% | 35.73% | 30.07% | 27.04% | 31.34% | 35% | 37.09% | 39.37% | 41.21% | 36.83% | 35.22% |
| Research & Development | 266.18M | 261.79M | 263.66M | 271.52M | 261.17M | 253.64M | 239.04M | 237.87M | 236.79M | 233.31M | 219.61M | 201.32M | 183.13M | 168.75M | 140.14M | 123.92M | 104.98M | 66.71M | 62.08M | 44.11M | 35.38M | 30.53M | 23.48M | 18.26M |
| R&D % of Revenue | - | 19.4% | 20.7% | 20.89% | 20.83% | 19.8% | 20.58% | 19.16% | 22.45% | 21.57% | 21.41% | 20.74% | 19.07% | 18.55% | 15.13% | 12.97% | 11.38% | 9.27% | 9.7% | 9.15% | 9.04% | 9.31% | 8.12% | 8.4% |
| Other Operating Expenses | 1.45M | 15.01M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 254.61M | 264.96M | 264.71M | 262.81M | 217.23M | 340.76M | 220.56M | 293.63M | 183.06M | 261.49M | 233.03M | 213.55M | 276.12M | 251.14M | 363.18M | 433.14M | 446M | 342.5M | 286.28M | 184.85M | 125.96M | 82.06M | 67.6M | 47.67M |
| Operating Margin % | 18.65% | 19.64% | 20.78% | 20.22% | 17.33% | 26.6% | 18.98% | 23.65% | 17.36% | 24.18% | 22.72% | 22% | 28.76% | 27.61% | 39.21% | 45.33% | 48.34% | 47.6% | 44.72% | 38.35% | 32.17% | 25.02% | 23.39% | 21.92% |
| Operating Income Growth % | - | 0.09% | 0.72% | 20.99% | -36.25% | 54.5% | -24.89% | 60.4% | -29.99% | 12.21% | 9.12% | -22.66% | 9.95% | -30.85% | -16.15% | -2.88% | 30.22% | 19.63% | 54.87% | 46.76% | 53.49% | 21.39% | 41.82% | - |
| EBITDA | 357.24M | 363.56M | 352.04M | 358.33M | 320.84M | 436.62M | 311.44M | 378.76M | 264.34M | 345.8M | 318.18M | 282.68M | 329.4M | 304.38M | 407.06M | 477.13M | 480.94M | 371.23M | 311.1M | 199.66M | 138.84M | 93.41M | 76.12M | 55.16M |
| EBITDA Margin % | 26.17% | 26.95% | 27.64% | 27.57% | 25.59% | 34.08% | 26.81% | 30.51% | 25.07% | 31.98% | 31.02% | 29.12% | 34.31% | 33.46% | 43.95% | 49.94% | 52.12% | 51.59% | 48.59% | 41.42% | 35.46% | 28.48% | 26.33% | 25.37% |
| EBITDA Growth % | -5.54% | 3.27% | -1.76% | 11.69% | -26.52% | 40.19% | -17.77% | 43.28% | -23.56% | 8.68% | 12.56% | -14.18% | 8.22% | -25.22% | -14.69% | -0.79% | 29.55% | 19.33% | 55.82% | 43.81% | 48.63% | 22.72% | 37.98% | - |
| D&A (Non-Cash Add-back) | 102.63M | 98.6M | 87.33M | 95.51M | 103.61M | 95.86M | 90.88M | 85.12M | 81.28M | 84.31M | 85.15M | 69.13M | 53.28M | 53.24M | 43.88M | 43.99M | 34.94M | 28.73M | 24.81M | 14.8M | 12.88M | 11.35M | 8.52M | 7.5M |
| EBIT | 278.32M | 279.97M | 312.48M | 250.05M | 215.28M | 354.51M | 239.72M | 282.31M | 196.37M | 256.64M | 235.9M | 245.78M | 276.1M | 250.65M | 369.19M | 440.64M | 437.71M | 372.35M | 303.93M | 212.53M | 148.41M | 93.07M | 70.44M | 0 |
| Net Interest Income | 10.08M | 15.38M | 34.08M | 28.09M | 6.57M | 3.49M | 12.72M | 24.92M | 18.97M | 9.58M | 5.68M | 4.54M | 3.34M | 3.85M | 6.21M | 10M | 6.59M | 10.33M | 15.76M | 23.05M | 16.96M | 5.11M | -912K | -2.15M |
| Interest Income | 14.19M | 15.38M | 34.08M | 28.09M | 6.57M | 3.49M | 12.72M | 24.92M | 18.97M | 9.58M | 5.68M | 4.54M | 3.34M | 3.85M | 6.41M | 10M | 7.3M | 11.27M | 17.89M | 26.16M | 18.73M | 6.96M | 1.44M | 0 |
| Interest Expense | 4.12M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 196K | 0 | 703K | 935K | 2.13M | 3.11M | 1.77M | 1.85M | 2.35M | 2.15M |
| Other Income/Expense | 33.88M | 38.53M | 47.77M | -12.76M | -1.95M | 13.75M | 19.15M | -11.33M | 13.31M | -4.84M | 2.88M | 32.23M | -22K | -490K | 5.81M | 7.5M | -8.99M | 28.92M | 15.52M | 24.56M | 20.68M | 9.16M | 491K | -219K |
| Pretax Income | 288.49M | 303.49M | 312.48M | 250.05M | 215.28M | 354.51M | 239.72M | 282.31M | 196.37M | 256.64M | 235.9M | 245.78M | 276.1M | 250.65M | 368.99M | 440.64M | 437.01M | 371.42M | 301.8M | 209.42M | 146.64M | 91.22M | 68.09M | 47.61M |
| Pretax Margin % | 21.14% | 22.49% | 24.53% | 19.24% | 17.17% | 27.67% | 20.63% | 22.74% | 18.62% | 23.73% | 23% | 25.32% | 28.75% | 27.55% | 39.84% | 46.12% | 47.36% | 51.62% | 47.14% | 43.44% | 37.45% | 27.81% | 23.56% | 21.89% |
| Income Tax | 43.15M | 46.99M | 48.16M | 48.41M | 31.38M | 36.69M | 8.1M | 26.8M | 154.07M | 54.22M | 49.5M | 62.54M | 67.38M | 60.34M | 103.86M | 130.06M | 154.19M | 127.07M | 100.77M | 65.13M | 55.83M | 37.33M | 27.32M | 16.08M |
| Effective Tax Rate % | 14.96% | 15.48% | 15.41% | 19.36% | 14.58% | 10.35% | 3.38% | 9.49% | 78.46% | 21.13% | 20.98% | 25.45% | 24.4% | 24.08% | 28.15% | 29.52% | 35.28% | 34.21% | 33.39% | 31.1% | 38.08% | 40.92% | 40.12% | 33.77% |
| Net Income | 243.65M | 255.02M | 261.82M | 200.66M | 184.09M | 310.23M | 231.36M | 255.15M | 41.75M | 201.8M | 185.86M | 181.39M | 206.1M | 189.27M | 264.3M | 309.27M | 283.45M | 242.99M | 199.46M | 142.83M | 89.55M | 52.29M | 39.84M | 30.97M |
| Net Margin % | 17.85% | 18.9% | 20.56% | 15.44% | 14.68% | 24.21% | 19.91% | 20.55% | 3.96% | 18.66% | 18.12% | 18.69% | 21.47% | 20.81% | 28.53% | 32.37% | 30.72% | 33.77% | 31.15% | 29.63% | 22.87% | 15.94% | 13.78% | 14.24% |
| Net Income Growth % | -5.06% | -2.6% | 30.48% | 9% | -40.66% | 34.09% | -9.32% | 511.2% | -79.31% | 8.58% | 2.46% | -11.99% | 8.89% | -28.39% | -14.54% | 9.11% | 16.65% | 21.83% | 39.65% | 59.5% | 71.24% | 31.25% | 28.65% | - |
| Net Income (Continuing) | 245.33M | 256.49M | 264.32M | 201.64M | 183.9M | 317.82M | 231.62M | 255.5M | 42.3M | 202.43M | 186.4M | 183.24M | 208.72M | 190.3M | 265.13M | 310.58M | 282.83M | 244.35M | 201.03M | 144.28M | 90.8M | 53.89M | 40.77M | - |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 9.14M | 9.39M | 9.73M | 17.08M | 4.84M | 6.25M | 5.76M | 5.68M | 6.57M | 7.1M | 8.48M | 8.94M | 21.63M | 18.92M | 22.96M | 21.84M | 20.94M | 22M | 22.1M | 22.28M | 19.91M | 18.26M | 17.2M | 16.13M |
| EPS (Diluted) | 2.55 | 2.62 | 2.69 | 1.96 | 1.81 | 2.97 | 2.25 | 2.44 | 1.14 | 1.95 | 1.81 | 1.73 | 1.99 | 1.84 | 2.46 | 2.75 | 2.46 | 2.11 | 1.74 | 1.26 | 0.80 | 0.50 | 0.43 | 0.36 |
| EPS Growth % | -4.53% | -2.6% | 37.24% | 8.29% | -39.06% | 32% | -7.79% | 114.04% | -41.54% | 7.73% | 4.62% | -13.07% | 8.15% | -25.2% | -10.55% | 11.79% | 16.59% | 21.26% | 38.1% | 57.5% | 60% | 16.28% | 19.44% | - |
| EPS (Basic) | - | 2.66 | 2.74 | 2.00 | 1.84 | 3.07 | 2.30 | 2.51 | 1.18 | 1.98 | 1.85 | 1.75 | 2.02 | 1.86 | 2.47 | 2.78 | 2.50 | 2.15 | 1.79 | 1.31 | 0.85 | 0.54 | 0.47 | 0.36 |
| Diluted Shares Outstanding | 95.52M | 97.48M | 97.33M | 97.59M | 101.98M | 104.62M | 102.94M | 104.57M | 106.98M | 103.29M | 102.42M | 103.86M | 103.63M | 102.79M | 107.54M | 112.55M | 115.39M | 115.37M | 114.78M | 113.57M | 111.66M | 104.22M | 92.78M | 86.08M |
| Basic Shares Outstanding | 95.22M | 95.87M | 95.54M | 95.79M | 99.99M | 101.19M | 100.56M | 101.63M | 103.38M | 101.78M | 100.72M | 102.35M | 102.15M | 101.88M | 106.93M | 111.44M | 113.45M | 113.1M | 111.49M | 109.2M | 105.69M | 96.97M | 85.56M | 85.01M |
| Dividend Payout Ratio | - | 49.64% | 43.76% | 51.53% | 54.36% | 28.74% | 38.29% | 30.37% | 158.47% | 28.27% | 26.04% | 22.61% | - | 215.67% | - | - | - | - | - | - | - | - | - | - |
Royalty-free codec adoption
As reported in recent financial statements, DLB's revenue growth remains inconsistent, fluctuating between a 2.9% contraction in 2026Q1 and a 7.1% expansion in 2026Q2, reflecting the inherent volatility of the company's reliance on consumer electronics shipment cycles and the timing of licensing royalty recognitions.
The revenue trajectory suggests a mature business model that is highly sensitive to the cadence of global OEM product launches. Investors should monitor whether the recent uptick in 2026Q2 represents a sustainable recovery or merely a seasonal anomaly driven by the timing of royalty reporting.
Based on the company's reported figures, gross margins have consistently hovered near 88%, underscoring the high-margin nature of its intellectual property licensing model despite the occasional drag introduced by the lower-margin hardware and services segment during periods of increased operational investment.
This exceptional margin profile indicates significant pricing power and a low marginal cost of delivery for its core codec technologies. However, the slight compression observed in certain quarters warrants further investigation into whether this reflects a shift in product mix or increased competitive pressure on royalty rates.
According to the income statement data, operating margins have swung significantly from 9.7% in 2025Q4 to 29.1% in 2026Q2, suggesting that the company's fixed cost base, particularly in R&D, creates substantial operating leverage that amplifies bottom-line results during periods of revenue growth.
The lack of consistent operating margin expansion implies that management continues to prioritize heavy investment in R&D to maintain its technological moat. This strategy appears to protect the company's long-term competitive position but results in significant earnings volatility when top-line growth stalls.
As indicated by the quarterly filings, the company's net income is periodically impacted by significant stock-based compensation expenses, which reached $37.2 million in 2026Q1, thereby creating a notable divergence between GAAP earnings and the underlying cash-generative capacity of the core licensing business.
The presence of these non-cash charges suggests that investors should focus on cash flow metrics to gauge the true economic performance of the firm. The variability in these expenses may indicate a management strategy that uses equity-based incentives to align employee interests with long-term R&D objectives.
While the company maintains a dominant market position, the rise of royalty-free alternatives like AV1, as noted in industry context, poses a long-term threat to the sustainability of the current licensing revenue model, potentially forcing a structural reduction in royalty rates to maintain market share.
The market may be underestimating the risk that 'good enough' audio and video standards could eventually erode the company's pricing power in the mobile and streaming segments. Investors should monitor the adoption rates of these open-source alternatives as a leading indicator of potential future margin compression.
Quick answers to the most common questions about buying DLB stock.
For fiscal year 2025, Dolby Laboratories, Inc. (DLB) reported total revenue of $1.35B. This represents a 520.4% increase compared to $217.5M in 2003.
Dolby Laboratories, Inc. (DLB) is profitable, generating $255.0M in net income for the fiscal year ending 2025 with a net profit margin of 18.9%.
Dolby Laboratories, Inc. (DLB) reported an operating income of $265.0M, resulting in an operating profit margin of 19.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Dolby Laboratories, Inc. (DLB) generated $1.19B in gross profit for the year, representing a gross profit margin of 88.1%. This demonstrates the company's core pricing power and production efficiency.