Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing fiscal third quarter results. As a reminder, this call is being recorded, Thursday, July 29, 2021. I would now like to turn the conference call over to Jason Dea, Senior Director of Finance and Investor Relations for Dolby Laboratories. Please go ahead, Jason.

Good afternoon. Welcome to Dolby Laboratories Third Quarter 2021 Earnings Conference Call. Joining me today are Kevin Yeaman, Dolby Laboratories' President and CEO; and Lewis Chew, Executive Vice President and Chief Financial Officer. As a reminder, today's discussion will include forward-looking statements, including our fourth quarter, second half, and fiscal 2021 outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today. In particular, the extent of the continued impact of COVID-19 on our business remains uncertain at this time. A discussion of these and additional risks and uncertainties can be found in the earnings press release that we issued today under the section captioned Forward-Looking Statements as well as in the Risk Factors section of our most recent quarterly report on Form 10-Q. Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events. During today's call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings press release and in the Dolby Laboratories Investor Relations data sheet on the Investor Relations section of our website. As for the content of today's call, Kevin will start with a discussion of the business. And Lewis will follow with a recap of Dolby's financial results and provide our fourth quarter, second half and fiscal 2021 outlook. So with that introduction behind us, I will now turn the call over to Kevin.

Thank you, Jason, and good afternoon, everyone. Q3 was another strong quarter for Dolby. Our revenue and earnings for the quarter were solid, and we are on track to deliver annual revenue growth of over 10% and year-over-year earnings growth at an even higher rate. At the same time, Dolby experiences are accessible to a growing number of people around the world, highlighted by the launch of Dolby Atmos on Apple Music and the Tokyo Olympics broadcasted in Dolby Vision and Dolby Atmos. Before Lewis takes you through the numbers, I wanted to highlight the recent progress we have made in enabling Dolby experiences across a much broader range of content, which creates opportunities for continued revenue and earnings growth. The inclusion of Dolby Atmos on Apple Music marks a significant step forward in bringing Dolby Atmos music to a much larger audience and establishing it as the best way to create and listen to music. The Dolby Atmos music experience has been prominently featured by Apple and has been met with positive and enthusiastic reactions from artists, industry partners, and consumers. Apple Music subscribers around the world can easily access albums and playlists of Dolby Atmos songs and can enjoy their music across Apple's wide range of products that support the combined Dolby experience. And recently, Dolby Atmos-enabled Android devices can also enjoy Dolby Atmos on Apple Music. Beyond Apple Music, Naver Vibe, a music streaming service in South Korea, launched support for Dolby Atmos this quarter. And additionally, our partners like TIDAL, Amazon Music, Hungama, and Anghami continue to grow the number of songs available in Dolby Atmos on their streaming services. As the ways in which consumers can enjoy Dolby Atmos music expands, we are also focused on growing the library of music through our engagement with artists and music distributors. DistroKid, a leading distributor of independent music, announced that they will be delivering songs in Dolby Atmos on both Apple Music and TIDAL. We see enthusiastic engagement from popular artists, including Ariana Grande, BTS, Billie Eilish, and Glass Animals, who are among the many artists highlighting the availability of their music in Dolby. As we expand the availability of Dolby Atmos music to consumers, we add to the reasons to adopt Dolby Atmos in mobile, PC, and automotive. We also had some exciting wins in live broadcast this quarter. Comcast is currently delivering NBC's Live Tokyo Olympics coverage in both Dolby Vision and Dolby Atmos to their X1 customers. This marks the first time that the Olympics can now be enjoyed in the combined experience. Also this quarter, Euro 2020 broadcasted in Dolby Atmos across multiple broadcasters in Poland, Malaysia, across the Middle East and North Africa. And the EuroVision Song Contest was broadcast in Dolby Atmos live to viewers in the Netherlands. By enabling a growing number of live broadcast events, we build upon our strong presence in movie and TV content and add to the value proposition for deeper adoption of Dolby in TVs, set-top boxes, DMAs, and mobile applications. The momentum of Dolby Vision and Dolby Atmos content across streaming services continues to be strong as our partners bring new titles in Dolby Vision and Dolby Atmos. Paramount+ added support for Dolby Atmos when they recently released A Quiet Place II in the combined Dolby experience. We have also seen our partners expand the amount of original local content that is enabled in Dolby. iQIYI recently announced they will be making Dolby Vision and Dolby Atmos content available on their international app that is available in over 190 countries and will be enabling Dolby experiences in new original local content on their platform. Apple TV+ is enabling new local episodic content in Dolby Vision and Dolby Atmos in Korea. Netflix released their first original film for Thailand in Dolby Vision this quarter, and Disney+ Hotstar is enabling new local content for India in Dolby. Stan, a leading OTT service in Australia, now supports the combined Dolby experience on their platform. Enabling relevant local content in Dolby is another important factor in driving more adoption across the global markets that our OEM partners serve. This quarter, Xiaomi and Skyworth released new TV models highlighting both Dolby Vision and Dolby Atmos. In Japan, Regza launched their first TV with Dolby Vision IQ, adding to a growing list of partners that includes LG, Panasonic, TCL, Xiaomi, and Hisense. Sagemcom recently launched their all-in-one video soundbox, which combines set-top box and sound bar functionality with support for Dolby Atmos. And LG announced the rollout of updates coming to their OLED TVs that optimize for the best gaming experience in Dolby Vision. Gaming is another area we are focused on growing the number of experiences in Dolby, and we have begun to see momentum with mobile games becoming available in Dolby Atmos. With gaming and music, we are enabling more of the relevant content for mobile phones and PCs to now be Dolby experiences, adding to the reasons for adoption on these devices. This quarter, we saw Dolby Atmos highlighted across several mobile phone launches in India, including Oppo and their Realme branded phones and Xiaomi's Redmi gaming smartphone. Within PC, Samsung recently launched a new Galaxy Book lineup featuring Dolby Atmos. We continue to build our momentum of Dolby Vision and Dolby Atmos across content, services, and devices. And at the same time, we still see significant opportunity to increase adoption as we grow the amount of content experiences available in Dolby. Let me shift to Cinema. We now have about 95% of our Dolby Cinemas open globally, and our partners remain deeply engaged. In recent months, more content has returned to the big screen, and we have seen positive signs in box office performance. This was highlighted in the U.S. with strong opening weekends from titles like Black Widow and F9: The Fast Saga that were both available in Dolby Cinema. We continue to see moviegoers seeking to enjoy these movies in the best way possible with box office skewing more towards Dolby Cinema and premium experiences compared to pre-pandemic levels. And we are now bringing Dolby expertise and innovations that create the best way to enjoy content to a much broader range of experiences and real-time interactions through Dolby.io. We are very excited to have welcomed Marie Huwe to the Dolby team this quarter to lead our Dolby.io efforts. Marie brings strong leadership experience and a track record of leading engagement with developer communities, including most recently at DocuSign, where she established the company's first-class developer experience. During our first year with Dolby.io in market, our focus has been on building our engagement with the developer community, learning from these interactions, and continually evolving our offerings to best meet the needs of developers. Since launch, we have seen strong demand for higher-quality, real-time experiences. We have now begun to roll out a significant update that will enable larger scale interactions with more participants. We have positive feedback from current customers who are now live with this release, and we are actively engaging a significant pipeline of potential customers that these increased capabilities can directly address. We see engagement across a variety of use cases, including podcasting, remote collaboration tools, virtual meetings, and online education. We are excited by the many ways developers are engaging with our APIs, and we are just at the beginning of what Dolby.io can enable in creating higher-quality, everyday audiovisual experiences. So to wrap up, Dolby is available to a much larger audience across a wider range of content today than ever before. As we build upon our presence in movie and TV content with more Dolby experiences in music, gaming, and live events, we increase the reasons for deeper adoption of Dolby across devices. And with Dolby.io, we are building the momentum to bring the Dolby magic to a wide range of use cases and experiences. All of this gives us confidence in our ability to drive revenue and earnings growth into the future. And with that, I'd like to hand it over to Lewis to take us through the financials.

And as Kevin mentioned earlier, we had another solid quarter. I'll review the Q3 numbers and then provide an outlook for Q4. Starting with revenue, in the third quarter, we reported $287 million, which fell at the higher end of our guidance range and included a true-up of about $14 million for Q2 shipments that exceeded original estimates, which is a common occurrence. Year-over-year, Q3 revenue was approximately $40 million higher than last year's Q3, benefiting from a larger total addressable market and greater adoption of our Dolby technologies. Compared to Q2, revenue decreased mainly due to the timing of revenues from contracts and patent licensing programs, which we anticipated during our guidance. Q3 revenue was made up of $272 million in licensing and $15 million in products and services. Now, turning to licensing revenue trends by end market, broadcast accounted for about 46% of total licensing in Q3. Broadcast revenues grew by approximately 40% year-over-year, driven by increased market volume, recoveries, and adoption of our Dolby technologies. Sequentially, broadcast increased by around 18%, largely due to higher recoveries. In the mobile sector, which represented about 18% of total licensing in Q3, revenues declined by about 36% year-over-year, mostly due to lower recoveries, although this was partially offset by higher market volume. Sequentially, mobile was down about 24%, primarily due to the timing of revenue under contracts, which we had anticipated. Consumer electronics made up approximately 14% of total licensing in Q3, with an 86% increase year-over-year, thanks to higher market volume, greater adoption of Dolby technologies, and higher recoveries. However, sequentially, CE declined by about 22% due to the timing of revenue under contracts. The PC segment, which represented about 9% of total licensing, saw a 6% increase year-over-year due to greater market volume and increased adoption of Dolby Vision and Dolby Atmos, although this was partly offset by lower recoveries. PC revenues were down about 51% sequentially, primarily due to the timing of revenue. Other markets accounted for about 13% of total licensing in Q3, with a 42% year-over-year growth, driven by increased revenue from Dolby Cinema and gaming. Sequentially, other markets were up about 4% due to these factors. In terms of products and services, revenue was about $15.2 million in Q3, slightly down from $16 million in Q2 and up from $11.8 million in Q3 of the previous year, reflecting modestly higher demand in the cinema industry. Moving to Q3 margins and operating expenses, our total gross margin was 89% on a GAAP basis and 89.7% on a non-GAAP basis. The gross margin for products and services on a GAAP basis was a negative $3.9 million in Q3 compared to a negative $345,000 in Q2, while on a non-GAAP basis it was a negative $2.6 million compared to a positive $1.1 million in the previous quarter. Both GAAP and non-GAAP product gross margins were lower than previously guided due to write-downs for conferencing hardware during Q3. Operating expenses were $199.1 million on a GAAP basis in Q3, down from $204 million in Q2. On a non-GAAP basis, operating expenses were $173.6 million in Q3 compared to $178.4 million in Q2. Our operating expenses were below guidance, mainly due to the timing of some marketing programs that shifted from Q3 to Q4, which will be reflected in our Q4 expense guidance. Operating income in Q3 was $56.1 million on a GAAP basis, or 19.6% of revenue, compared to $34.1 million, or 13.8% of revenue, in Q3 of the previous year. On a non-GAAP basis, operating income was $83.6 million, or 29.1% of revenue, compared to $60.5 million, or 24.5% of revenue, in last year's Q3. The income tax rate in Q3 was 7.7% on a GAAP basis and 13.7% on a non-GAAP basis. Net income on a GAAP basis was $54.6 million, or $0.52 per diluted share, compared to $67.3 million, or $0.66 per diluted share, in Q3 of the previous year. It’s important to note that last year's Q3 net income included $36 million of discrete tax benefits, which impacts year-over-year comparisons. Non-GAAP net income in Q3 was $74.8 million, or $0.71 per diluted share, compared to $87.5 million, or $0.86 per diluted share, a year ago, benefiting from that one-time tax credit. For both GAAP and non-GAAP, Q3 net income was above guidance due to revenue recording at the higher end of our range and expenses being lower than anticipated. In Q3, we generated $172 million in cash from operations, compared to $134 million in the same quarter last year. We ended the third quarter with approximately $1.3 billion in cash and investments. During this period, we repurchased about 400,000 shares of common stock and finished the quarter with around $37 million remaining in stock repurchase authorization. Additionally, we announced that the Board of Directors has approved another $350 million in stock repurchase authorization. Combining this new approval with the remaining balance from the end of June brings our total stock repurchase authorization to $387 million. We also declared a cash dividend of $0.22 per share, payable on August 19, 2021, to shareholders of record on August 11, 2021. Now, looking ahead to the outlook, last quarter, we indicated that our second half revenue could be between $560 million and $600 million. After Q3's results, we are revising our second half revenue range to $570 million to $600 million, adjusting the lower end up by $10 million, which leads us to expect Q4 revenue to be between $280 million and $310 million. Within that projection, licensing is expected to range from $265 million to $290 million while products and services are anticipated to range from $15 million to $20 million. Regarding market conditions and industry forecasts, there remains a degree of uncertainty, so we are maintaining similar assumptions as discussed last quarter. We expect the total addressable market for PCs in the second half to be higher year-over-year, while the market for TVs and other consumer devices may decline. We anticipate year-over-year organic growth from the wider adoption of Dolby technologies in various markets, along with increased revenue from Dolby Cinema as the industry shows signs of improvement. As for Q4 guidance, we estimate a gross margin on a GAAP basis to range from 88% to 89%, while the non-GAAP gross margin is expected to be between 89% and 90%. For products and services, the gross margin is estimated to be around breakeven to $1 million on a GAAP basis and between $1 million and $2 million on a non-GAAP basis. GAAP operating expenses in Q4 are projected at $216 million to $226 million, while non-GAAP operating expenses are estimated to range from $190 million to $200 million. The increase from Q3 to Q4 will predominantly stem from specific marketing programs that shifted from Q3 to Q4. Overall, marketing expenses for the full fiscal year 2021 are expected to be comparable to last year, or perhaps slightly lower, depending on Q4 results. In terms of other income, projections for Q4 range from $1 million to $2 million, and the effective tax rate for Q4 is estimated to be between 19% and 20% on both GAAP and non-GAAP bases. Based on these factors, we estimate that Q4 diluted earnings per share could range from $0.25 to $0.40 on a GAAP basis and from $0.47 to $0.62 on a non-GAAP basis. Now for the fiscal year 2021 outlook, we anticipate revenue between $1.28 billion and $1.31 billion, with a gross margin forecast of 89% to 90% on a GAAP basis and 90% to 91% on a non-GAAP basis. Total operating expenses for the year are expected to be between $810 million and $820 million on a GAAP basis and $710 million to $720 million on a non-GAAP basis. Full year diluted earnings per share are estimated to range from $2.79 to $2.94 on a GAAP basis and from $3.57 to $3.72 on a non-GAAP basis. With that, I'll now move on to Q&A and turn it over to the operator.

Your first question comes from Ralph Schackart with William Blair.

First question is on io. Kevin, in the prepared remarks, you talked about a significant update. I think you said more specifically, it allows larger interactions with more participants. Just curious, was this sort of a limitation of the io offering and does this sort of widen the aperture for new customers? Just trying to gauge how significant this update is.

Well, it significantly increases the number of participants we can support in audio/video events, and so we launched with our APIs about a year ago. We started out with a number of features that improve capture quality. We have, of course, Dolby Voice embedded in the service. And yes, we began engaging with customers who had greater needs for more participants. And so the significance of this release is that it's going to enable us to engage with more developers for larger events and more usage. So we're excited to bring this to life.

Great. I guess now that you have the new release and then you've had, I guess, another quarter or two with partnerships such as Box, can you maybe just sort of help us understand the monetization opportunities? And I know it's tough to put a number on the market opportunity, but any sort of methods or methodologies you sort of help us think about how to gauge this opportunity, I think, would be helpful.

Well, starting at the very highest level, Ralph, there are hundreds of billions of audio/video interactions going on every month, and there's hundreds of billions of minutes of media content in the cloud. And we strongly believe at Dolby that people want to have the best quality experiences, and that's what we're seeing from the developers that are engaging with us today. So we're confident that there's a very large addressable market. And so today, what we're focused on is continuing to evolve the platform based on what we're hearing and bringing on more developers and getting more usage. We've seen some really great use cases developing. And so the monetization model, as you know, is usage basis, and we're seeing that now. So it's all about getting more adoption and more usage.

Great. Last one, and I'll turn it over. Just curious if there's any updates on the CFO search?

Well, we are in the process. I'm confident that there's a lot of great candidates out there. We also have a great team here at Dolby. So we're progressing, and we'll keep you updated.

The next question is from Steven Frankel with Collier Securities.

Can you provide an update on the changes that Marie has implemented in the new leadership within that group?

Thanks, Steve. You were cutting out a bit, but I believe I understood your question. To clarify, you’re asking about Marie joining and what the focus will be. Is that correct?

Yes, what

Yes. So well, look, I think first and foremost, she's diving right into the roadmap we have. Like I said, this was a big release for us, which obviously was in the works even as Marie joined. And she's working with the team to look at the roadmap for our platform, to look at areas that we can accelerate, those that we think will create the most engagement with developers and increased usage. She also has spent decades involved in businesses that are centered around developer communities. So you can expect to see us engaging in stepping up our efforts to market this to developers, engage with developers, and build that community.

Okay. Congratulations on the progress of live events in Atmos and Vision. Are there any updates needed before this can truly expand beyond just a one-off event like the Olympics?

I'm sorry, Steve, you're cutting in and out, but I understand your question is about the live broadcast of the Olympics. I think you're asking what needs to be done in the future to accelerate that. Is that correct? I was catching part of it, but now you've completely cut out.

Yes. How do you make this a more commonplace?

How do we make it more commonplace, I think that's what you just said, right?

Right.

We're excited that Comcast is making the Olympics available in both Vision and Atmos. Our collaboration with Comcast has been ongoing, and each event represents a step towards making these technologies more common. It's important to ensure that everyone involved in these live events—many of whom are doing this for the first time—has the proper equipment and software ready. Each event provides valuable experience that helps pave the way for future broadcasts. We're particularly enthusiastic about the other events we mentioned in Dolby Atmos, which remains a key focus for our organization. While there is a learning curve for first-timers, high-profile events like this mark significant progress, and we anticipate that many people will transition from this event to others, gaining familiarity along the way.

The next question is from James Goss with Barrington Research.

I'd like to start with Dolby Music. You've talked about a lot of devices and services, where there's availability and people can sample this. Now I'm wondering if you could synthesize it into, first, like what is required then for individuals to be able to take advantage of the service? And what do you think would be a currently enabled total addressable market, if you will, in taking advantage of music? And are there unit sales beyond the existing sales of AV receivers, sound bars, PCs that would be a benefit from the music development?

Sure, thank you for the question. Anyone who subscribes to one of our service partners that offers a Dolby Atmos device can enjoy the Dolby Atmos experience. We're very excited about our partnerships, including Apple Music and Naver Vibe in South Korea. We are also focusing on regional partnerships with companies like Hungama and Anghami, which is increasing the number of users who can access the service significantly. The key takeaway is that in the mobile phone and PC markets, we've been successful with high-end offerings that initially focused on movies and TV, which are now being enhanced by our advancements in mobile gaming. Music has a wide appeal, and we believe it greatly expands the potential market for mobile devices and PCs that can benefit from Dolby Atmos. Regarding new areas, I would highlight the automotive sector, as there is a strong emphasis among artists and service providers on creating a rich music experience there. This gives us a significant opportunity to make progress in the automotive market.

And in that regard, are you developing relationships at the OEM level in the way SiriusXM would to try to get in the new systems and cars? Is that part of it?

Yes, that's right. So you saw that we last quarter announced that Lucid Air would be bringing the Dolby Atmos music experience to life, and we are engaged across the industry looking to bring Dolby Atmos to more cars.

Okay. And one other thing. In cinema, obviously, you're in the middle of all of the windows issues and that sort of thing with Dolby Cinema. And today, there is a lawsuit with Scarlett Johansson trying to look at Disney to maybe pull back a little bit on the day and date and maybe help a business like yours and IMAX with the theatrical window. I wonder if you might comment on any reaction you have. It's a relatively expanding event, but perhaps you have some thoughts.

I don't think so. I mean, honestly, I had not seen that news, but our belief is that for these blockbuster movies that are the ones that show in Dolby Cinema that people are going to want to see them in the big screen experience. And that what we've seen is that as we begin to see box office return, we have seen the percentage of box office trending toward premium experiences in Dolby Cinema specifically commanding more of the box office than it was pre-pandemic. And I believe that stands reasoning. I think as people come back to the cinema, they want to have the best experience possible.

The next question is from Paul Chung with JPMorgan.

So your free cash flow has been very strong this year driven mostly by strong net income. So I don't really see any real kind of working capital benefits this year. So your free cash flow margin is kind of hitting levels last seen in 2011. Is this the new normal moving forward? Is this the baseline of free cash flow at $400 million plus kind of moving forward?

You want me take that one, Kevin?

Yes, please.

I guess the first wonder was whether my phone is working. I guess you're always very focused on the free cash flow. So a couple of comments I would make is, one, you see now that our cash flow generation is now running fairly consistent with the business operations. Obviously, there's ebb and flow to working capital quarter-to-quarter. But you'll also notice that this year, our operating margins are very strong, and part of that is because our gross margins have ticked up a little bit, and the gross margin improvement is because the mix of our revenue has been stronger than maybe what we would have anticipated at the beginning of the year. So I think that all ties together in the sense that we do believe that as a business, we will continue to generate a high degree of cash flow relative... Can you guys still hear me? Yes, no?

Okay. We can hear you now.

Okay, good. The funny thing about this, Paul, is believe it or not, I'm on a landline. So I'm not sure why it's cutting in and out because I'm looking at my phone and it says it's connected. I don't know that I'll ever be able to figure it out. Anyway, I'll wrap up by saying that the strong cash flow you see is very closely linked to our operating performance. Obviously, the timing from quarter to quarter does depend on when we collect those receivables. This year, our gross margins have increased and our operating margins are stronger than they have been historically. I think that all ties together. It's a very good story right now.

Your operating expenses are currently around 55% of sales. Is that the appropriate level to consider? It has varied between the mid-50s to 60s.

Yes. I have a couple of comments on that. Like many companies, we are experiencing some lower expenses due to the pandemic, with travel being the most noticeable example. I don't think we should expect these costs to stay this low indefinitely as other companies make progress. Are you able to hear me clearly on this call right now?

Yes.

Paul, okay, good. The second thing I'd like to point out to is just as a side note that FY '22, every 6 years or so, we have a 53-week year like many companies do, and we'll have a 53rd week next year. So that will be a little one-time blip next year in expenses. And so I think the OpEx to revenue range that you see right now is probably at the lower point of what we would normally run. But Kevin and I have talked quite a bit about the fact that we've always committed to keeping operating margins at or above that sort of 31% level. And now this year, with the improvement in gross margin, we see that ticking up a little bit. So probably some of that will come back a little bit, Paul, in terms of the OpEx ratio, not all of it. And think about it as just being a little bit of a bounce back from COVID. But also, next year, we'll have that extra week, which also then in the following year will go away. So a lot of things to think about. I know we're not ready to give FY '22 guidance yet, but your question kind of goes beyond Q4. So I thought it'd be worth getting you thinking about that.

Great. And then Kevin, on Vision, where are you on adoption rates in TVs today? Update there would be nice. And kind of what's your penetration rate kind of trending in PCs and smartphones? Do you see opportunities in auto? And then separately, Atmos in auto, given kind of the longer sales cycle, would adoption really take time for Atmos to take off in car speakers?

Yes. So well, I guess, at the highest level, I would start by saying that with the wins we've garnered throughout this year around music, around gaming, around services like Bilibili, more recently, live sport, we feel really good about the sales proposition we have to continue to bring the Dolby experience to more devices across all of the areas that you just went through. We have continued to increase the penetration on TVs with Dolby Vision and with Dolby Atmos. You've heard me today and throughout the quarters talk about a number of wins in PC and mobile, and automotive is an area where we expect to make progress. And I mean, of course, there's a lead time to implementation that lead time has come down from what it might have been 3 to 5 years ago. And especially, in the pure-play electric vehicle players, that can be much faster. And even with the traditional car manufacturers, you can get time frames that are within a year or so, I think, from when. I mean, obviously, mileage varies, but a lot of what we're going to be doing is through the software. So it will vary, but we're out there engaged. We think it's a really compelling experience, and we'll keep you updated as we go.

And then last housekeeping question. What was the segment in which the back payment came in from Q2 would be helpful?

The back payment that came in Q2. Can you give me a little more color on that question?

I thought you recognized the back payment in Q3 from Q2 shipments. Is that not the case?

Oh, I'm sorry. Yes, you mentioned the true-up. We generally do not break down the true-up by category, but I can say that our strongest market segment is broadcast, which did benefit from that true-up. So both TVs and set-top boxes would have seen significant benefits from it.

There are no additional questions waiting at this time. I will now pass the conference back to Kevin Yeaman for closing remarks.

Well, thank you, everybody, for joining, and we look forward to keeping you updated on our progress. Thank you.

That concludes the conference call. Enjoy the rest of your day.