Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing fiscal fourth quarter and fiscal 2017 results. [Operator Instructions] As a reminder, this conference call is being recorded, Wednesday, October 25, 2017. I would now like to turn the conference over to Elena Carr, Director of Corporate Finance and Investor Relations for Dolby Laboratories. Please go ahead.

Good afternoon. Welcome to Dolby Laboratories Fourth Quarter 2017 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. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. A discussion of some of these risks and uncertainties can be found in the earnings press release that we issued today under the section captioned Risk Factors as well as in our most recent 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 this call, Lewis will begin with a recap of Dolby's financial results and provide our fiscal 2018 outlook, and Kevin will finish with a discussion of the business. So with that introduction behind us, I now turn the call over to Lewis.

Thanks, Elena, and I'm still impressed that you can do the whole thing from memory. So I'll have to try to do that one of these days. So anyway, good afternoon, everyone. I will cover 3 areas for you today. First, I'll go over the Q4 results, and then since it is Q4, I'll go through the full year results on a summary basis, and then I'll give you an outlook for fiscal year 2018. So let me start with Q4. Total revenue in the fourth quarter was $242 million, which was right in the range we had projected and within the $242 million, about $213 million came from licensing and $29 million came from products and services. So let me cover the Q4 trends in licensing by the different end markets that we serve. Broadcast represented about 48% of total licensing in the fourth quarter, and revenues in this market were about the same as they were in Q3, but down year-over-year by about 4% due mainly to lower recoveries. PC represented about 14% of total licensing in the fourth quarter. PC was down sequentially by about 36%, but up year-over-year by about 2%. The sequential decline was mostly due to timing of revenue, and we anticipate that we'll see a similar pattern like this again next year, all else held equal. And the year-over-year increase was due to higher volume. Consumer electronics. Consumer electronics represented about 12% of total licensing in the fourth quarter, and licensing in this area was down sequentially by about 34%, due mainly to timing. And on a year-over-year basis, consumer electronics was roughly flat in licensing. Mobile devices were approximately 9% of total licensing in the fourth quarter, down sequentially by over 60%, but up year-over-year by about 4%, and the sequential trend was mainly due to timing of revenue. By the way, I've highlighted timing in PC, CE and mobile, and these types of movements were anticipated when we provided our Q4 guidance a quarter ago. Licensing and other markets represented about 17% of total licensing in the fourth quarter. They were about the same on a sequential basis, but they were higher by about 55% over last year's Q4. And the year-over-year growth was driven by higher-than-typical recoveries in automotive, along with organic revenue growth from Dolby Cinema. Product and services revenue was $28.7 million in Q4 compared to $27.6 million in Q3 and $29.5 million in last year's Q4. I'll now discuss margins and operating expenses. Total gross margin in the fourth quarter was 87.9% on a GAAP basis and 88.7% on a non-GAAP basis. Product gross margin on a GAAP basis was 38.5% in the fourth quarter compared to 33.9% in Q3. And product gross margin on a non-GAAP basis was 43.3% in the fourth quarter compared to 40.6% in Q3. Operating expenses in the fourth quarter on a GAAP basis were $189.5 million compared to $177.6 million in the third quarter. During Q4, we initiated a plan to reduce certain activities and reallocate those resources towards higher-priority investment areas. As a result, we're eliminating about 80 positions and those employees who are impacted were notified in September. And our Q4 GAAP operating expenses include a $12.9 million restructuring charge for severance-related costs. Operating expenses on a non-GAAP basis were $159.9 million in Q4 compared to $161.5 million in the third quarter. Operating income in the fourth quarter was $23.4 million on a GAAP basis or 9.6% of revenue, and operating income was $54.9 million on a non-GAAP basis or 22.7% of revenue. The effective tax rate for the fourth quarter was 17.2% on a GAAP basis and 19.4% on a non-GAAP basis. And so, net income in the fourth quarter was $21.8 million on a GAAP basis or 9% of revenue and was $46.6 million on a non-GAAP basis or 19.3% of revenue. Diluted earnings per share in the fourth quarter on a GAAP basis were $0.21 compared to $0.73 in the third quarter and $0.23 in Q4 of last year. On a non-GAAP basis, fourth quarter diluted earnings per share were $0.45 compared with $0.86 in Q3 and $0.37 in Q4 of last year. During Q4, we generated over $70 million in cash from operations and ended the quarter with over $1.1 billion in cash and investments. We bought back about 490,000 shares of our common stock in Q4 and ended the year with about $150 million of stock repurchase authorization still available. We also announced today a cash dividend of $0.16 per share, which is an increase from the $0.14 per share that we had been paying per quarter over this past year. The $0.16 dividend will be payable on November 15, 2017, to shareholders of record on November 6, 2017. Let me now provide a recap of full year results before I move on to the forward outlook. FY '17 total revenue was $1,081,000,000 representing an increase of 5% over the FY '16 total revenue of $1,026,000,000. Total operating expenses in FY '17 on a GAAP basis were about $715 million compared to $685 million in FY '16. On a non-GAAP basis, total FY '17 operating expenses were about $633 million compared to $611 million in FY '16. Total operating income FY '17 on a GAAP basis was $249 million or 23% of revenue, and on a non-GAAP basis, it was $339 million or 31.4% of revenue. In both cases, that represents growth of about 7% over last year's comparable number. Diluted earnings per share on a GAAP basis were $1.95 in FY '17 compared to $1.81 in FY '16. And on a non-GAAP basis, diluted earnings per share were $2.61 in FY '17 compared to $2.43 in FY '16. So that's it on the FY '17 results. Let me now cover the FY '18 outlook. For the full year FY '18, we estimate that total revenue will range from $1,140,000,000 to $1,170,000,000. Within the revenue total, we estimate that licensing will range from $1,110,000,000 to $1,140,000,000, while products and services are estimated to be around $130 million for the year. Here are some of the factors that are incorporated into the annual outlook. We anticipate that broadcast revenues would be flat to modestly up, as higher revenues from consumer imaging will be somewhat offset by lower recoveries. PC licensing is projected to be down slightly, while CE, consumer electronics, is projected to be up modestly. We expect mobile revenues to grow. This will be coming from audio and consumer imaging programs and also higher recoveries. The other licensing categories projected to be down because of lower recoveries, but that's partially offset by revenue growth in Dolby Cinema. And the estimated growth in products and services revenue will come from [ Cinema ] products and from Dolby Voice. Gross margin for the year is projected to be around 88% plus or minus on a GAAP basis, and about 89% plus or minus on a non-GAAP basis. Operating expenses are projected to range from $726 million to $736 million on a GAAP basis and from $655 million to $665 million on a non-GAAP basis. Other income is estimated to range from $10 million to $12 million for the year, and the effective tax rate is expected to range from 23% to 24%. For the first quarter, for Q1 of FY '18, we anticipate that total revenue will range from $260 million to $270 million. Within that, we estimate that licensing will range from $225 million to $235 million, while products and services is projected to be around $35 million for the quarter. Q1 gross margin on a GAAP basis is estimated to be around 88%, and the non-GAAP gross margin is estimated to be around 89%. Operating expenses in Q1 are projected to range from $174 million to $178 million on a GAAP basis and from $156 million to $160 million on a non-GAAP basis. Other income is projected to range from $2 million to $3 million for the quarter, and the effective tax rate is estimated at 23% to 24%. So based on a combination of the factors I just covered, we estimate that Q1 diluted earnings per share will range from $0.41 to $0.47 on a GAAP basis, and from $0.55 to $0.61 on a non-GAAP basis. So that's about all I have. By the way, this was the second year in a row that we grew revenue by 5% plus and earnings above that, and we are looking to improve upon that in FY '18. The outlook I just gave for revenue growth for the year equates the range of up 5% to 8% for the year. So with that, let me turn it over to Kevin.

Thank you, Lewis, and good afternoon, everyone. 2017 was a year of progress on many fronts. And going forward into 2018, we are focused on increasing our rate of revenue growth by expanding our leadership in audio entertainment solutions and by bringing our new audiovisual experiences to market, with the goal of returning to sustainable double-digit growth. Let me start with Dolby Vision. Apple announced this quarter that Dolby Vision will be included in the iPhone 10, the iPhone 8, the Apple TV 4K and iPad Pro. Apple's adoption will significantly increase the availability of Dolby Vision experiences to customers around the world. Already, iTunes has over 100 movies available in Dolby Vision and Netflix is streaming in Dolby Vision to these devices. This is another important endorsement that Dolby Vision is the best way to enjoy HDR content. Apple's announcement caps off a year of great progress with Dolby Vision. We started the year with Sony announcing their support on televisions and the first Dolby Vision Blu-ray players having been announced by Philips, OPPO and LG. The progress continues. We added a new partner, Vestel, the largest TV manufacturer in Europe, bringing our total to over 10 Dolby Vision TV partners. And Huawei, the second-largest set-top box provider in the world announced the inclusion of Dolby Vision in its flagship IPTV set-top box. This is the first Dolby Vision-enabled set-top box and lays the ground work for IPTV and other pay-TV operators to deliver Dolby Vision content. It was also a great year for Dolby Atmos adoption. We started off the year looking to expand Dolby Atmos beyond the traditional home theater. LG released the first TV with Dolby Atmos and Dolby Vision earlier this year, and we now have over a dozen sound bars with Dolby Atmos in market, up from 4 last year. CNET recently noted that Dolby Atmos is one of the most requested sound bar features from their readers. Most recently, Orange, the largest telecom provider in France has begun offering a Dolby Atmos sound bar to its subscribers, allowing for broader consumption of its growing amount of Dolby Atmos content. This year, PCs with Dolby Atmos were launched by Lenovo, Huawei, and Xiaomi. And this quarter, Amazon has expanded its Dolby Atmos support beyond the Fire HDX tablets and into the new Fire TV with 4K. Content, of course, is a key part of building Dolby Atmos and Dolby Vision ecosystems. Netflix began streaming in Dolby Atmos this year and is now offering a combined Dolby Vision and Dolby Atmos experience to its global subscriber base. Today, there are 4 OTT services streaming in both Dolby Vision and Dolby Atmos: Netflix; VUDU; TenCent; and most recently, ITE. There are 2 additional OTT services streaming in Dolby Vision and 4 additional services streaming in Dolby Atmos. Paramount, Lionsgate and Sony pictures are now releasing UHD Blu-rays in Dolby Vision and Dolby Atmos, and this quarter, Disney released its first titles with both Dolby Vision and Dolby Atmos for digital distribution to the home. During the year, Dolby Atmos content expanded beyond premium movie and TV content to gaming and live sports. In gaming, the first Dolby Atmos game for Xbox was released this week, Gears of War 4, and more will be released this quarter, including Assassin's Creed Origins. In live sports, BT started broadcasting in Dolby Atmos this year and delivered the entire season of Premier League Soccer in Dolby Atmos. This quarter, Sky Sports launched its live 4K services in Dolby Atmos. We're beginning to see activity in live sports with Dolby Vision as well. Last quarter, the French Open was broadcast in Dolby Atmos, AC-4 and Dolby Vision by France Television. And this quarter, we had several live broadcast trials with Dolby Vision and Dolby Atmos in the U.K., France, Spain and Brazil. Let me move on to Dolby Audio. We continue to be focused on expanding the presence of Dolby Audio, particularly in developing markets. In China, we've seen an expansion of faster IP networks, which creates an acceleration of IPTV adoption. We're well positioned for the China IPTV market with key service providers such as China Telecom, China Unicom and China Mobile. Also, in India this quarter, Free Dish, the country's fastest-growing satellite TV provider, specified Dolby Audio for its high-definition set-top boxes. We see an increasing number of OTT services streaming local content in Dolby Audio in emerging markets such as India and Indonesia. Now let's turn to Dolby Cinema. We are ending the year with 114 screens open around the world compared to about 40 a year ago. In total, we have over 360 Dolby Cinema locations open or committed, and we expect to open about as many screens this year as we did in fiscal 2017. This growth is a result of working with our existing partners such as AMC and Wanda throughout the year as well as by adding new partners. One of our newest partners, Pathé, in Europe, just opened its first Dolby Cinema screen in France last week. We also added new Dolby Cinema partners in China. CGV, one of the largest global exhibitors, announced plans today to open 30 locations in China. Additionally, Huayi Brothers plans to open 10 locations. Together with our existing partners in China, Wanda and Jackie Chan, we now have more than 140 screens open or committed in China. Over 60 movies have been released or announced for Dolby Cinema in China, including 16 China local language titles. The content pipeline for Dolby Cinema continues to grow. 120 titles in Dolby Vision and Dolby Atmos have been released or announced. Recent releases include the Kingman: The Golden Circle and Blade Runner 2049. We look forward to working with our partners to make the best movie going experience more broadly available around the world. Let me turn to Dolby Voice, our audio technology, which brings the feel of in-person meetings to audio and video conferencing. We started the year with primarily traditional audio conferencing partners and during the year, we built momentum in the area of huddle rooms and cloud-based collaboration. Earlier this month, BlueJeans launched BlueJeans Room with Dolby Voice. BlueJeans is a leading video meetings platform, and we are excited to partner with them and to see the Dolby Conference Phone front and center in their offering. This integrated solution positions Dolby Voice to provide great experiences in the huddle room, which is a rapidly growing market. So let me wrap up. 2017 was a great year for Dolby. We continued to expand our leadership in audio by broadening our presence online and in mobile and broadcast. Momentum is growing for the new experiences we have brought to market. We've significantly expanded the footprint of Dolby Cinema. Dolby Vision and Dolby Atmos are now shipping in a broad range of devices with an increasing amount of content. And we are expanding the availability of Dolby Voice to new faster-growing use cases. All of this gives me confidence that we can increase revenue growth and broaden the number of people that will enjoy Dolby experiences. I look forward to updating you next quarter. And with that, I'll turn it over to Q&A.

[Operator Instructions] And we'll take our first question from Mike Olson with Piper Jaffray.

Two questions, if I could. First, could you give us a sense for how much overall new initiatives revenue grew in fiscal '17? Did it turn out to be kind of the 2x growth from, I think, it was $30 million to $60 million or something like that? And then what would you expect it to be for fiscal '18 and where do expect the most significant growth to come from within new initiatives for the coming year?

Sure. So, Yes, we did end up at about double last year. So we doubled it to about $60 million, just over $60 million. And our guidance for 2018 is based on that, just over doubling going into 2018. And that's with contribution from all the new initiatives. I went through some of them for each of them with Dolby Vision. That's obviously, a result of being included in additional devices. Just this quarter, of course, we announced Apple. I mentioned earlier that we've added Vestel, another TV partner. With Dolby Cinema, it's about screen growth and we look to add a lot of screens next year. And for Dolby Voice, we're very excited about our partnership with BlueJeans, as we become much more relevant in the cloud-based video meeting market that is serving the increasing huddle room market. So they are all contributing to growth in 2018.

Okay. And then regarding the Apple deal for Dolby Vision. As is always the case, that one you can't talk specifics. But is that something that on its own can be material to your revenue? Or is it more of you've now got a great reference customer that can potentially lead to other manufacturers adopting it and that's when it can become more significant as a revenue contributor?

Well, Apple is a significant partner of ours, right. So I think it's an important customer. It always has been and continues to be. And it is also -- it is in addition to that a very important, I think, reference point for the developing ecosystem around Dolby Vision. We've got a robust ecosystem of partners and content. And of course, having that much broader of an audience of consumers who can experience Dolby Vision content is a big plus for any content producers or distributors who are considering their timing of when they were going to go live with Dolby Vision. And yes, other device manufacturers certainly keep apprised of what's going on around them in the market and it becomes -- we think it becomes a virtuous circle as this ecosystem really begins to develop.

Okay, Mike. Operator, just for a quick second. I want to make a verbal -- something I want to correct. I said verbally when I gave you guys a breakdown of the revenue, the total range is correct $1,140,000,000 to $1,170,000,000, and product and services $130 million, which means licensing should be $1,010,000,000, $1,040,000,000, not $1,110,000,000 to $1,140,000,000. So just correcting how I broke that down. Anyway, go on operator to the next question.

We'll take our next question from Steven Frankel with Dougherty.

Just a couple of questions around that guidance. So Kevin, you reiterated, again, your goal of getting to double-digit revenue growth and staying there. So maybe we'd start with what has to happen to move from kind of this 5 to 8 that you've guided to, to double-digit revenue growth?

Well, Steve, I think the clearest path is doing more of what we're doing. I mean, we've doubled revenue from new initiatives over the last year. As I said earlier, we are planning within our guidance to just over double it again next year. And as that base grows and we think we're really just at the early days of those opportunities. When you look at the number of audiovisual experiences, all the inter-connected devices in the world, all the hundreds of millions of moviegoers that enjoy premium experiences, and the billions of office workers that are going to be in communications experiences, we really are at the very beginning here. So for that to happen as soon as possible, as we'd all like, it's about getting more of those devices in market. For Dolby Vision, specifically, obviously, as we've talked about, Apple significantly increases the potential audience for Dolby Vision experiences. In TVs, we continue to add partners. As you know, we've been primarily in the premium units, which are the lower-volume units. We saw a couple of models begin shipping over this last year that are getting into some higher volumes, and we plan to see more of that in 2018. And what gets us there faster is more of those shipping sooner and maybe some hits in there and those SKUs that do better than we expect. On Dolby Cinema, it's obviously -- it's about getting more screens in market. And of course, it also has to do with the box office. I think it's no secret that the box office was pretty poor this summer. So going into next year, while we like the industry are optimistic about the outlook for the box office, we're going into the year planning on pretty similar box office levels from what we saw last year.

Okay. And then just one more on the guidance. The Q1 guidance is especially muted in terms of revenue. Is that just because it's a tough comp against last year when you had that shift in gaming platforms ramping? Or is there something you're seeing in Q1 that's making you a little more cautious on how you start off the year?

Steve, it's definitely not that. There is nothing about seeing something to make us more cautious. It really is a matter of some timing in last year in Q1, we did have some [ outside ] recoveries that we're not baking into this year's Q1. That's primarily driving that delta. If it were not for that, then I think you'd see a more normal curve. But it is worth noting though that for the full year, I know I made sort of a by-the-way comment in my prepared remarks, but we're going from growing the last 2 years at 5% and we're guiding 5% to 8%. So for the year, we see that stepping up, it's just as you know with our business, any one particular quarter does is not a linear progression.

And we'll take our next question from Eric Wold with B. Riley.

Follow-up question -- I've got 2 questions. One is a follow-up question on the last one. Your comments, Lewis, around Dolby Vision on the TV side. Can you update us on where you are in penetration of the UHD TVs as kind of price points continue to drop and as you get into the lower price points and kind of into ones that you characterize kind of that can get into volume? Are your licensed deals struck such that it's purely based on volume? Or is it based around price point of TV? And then I have a follow up to that.

Sure. So as it relates to the first part of your question. We, in previous calls, had been taking the question around the penetration of the premium UHD televisions. Last quarter, we said that we expected to exit the year, the calendar year, around 35% to 40%. That's still about what we're expecting. And as far as your question about the higher-volume units, we did see some models from VIZIO and from TCL begin shipping this last year, which were getting into some higher volumes. And in 2018, we expect to see more of that and continue to get into some of the more mainstream models. So our revenue agreements are not typically tied to price, so it's really -- it's about -- we're focused on is getting into as many units as possible and getting these experiences to as many consumers as possible.

Perfect. And then last question. On the large customer that is skewing Q3 revenues [ similar ] to the last couple of years around the audio. Should we expect kind of the new vision deal to roll into that same pattern and kind of just make Q3 even more skewed? Or is it going to be a different pattern of rev recognition?

Yes. Eric, as you know, I'm going to give the standard. We don't comment at a customer level. But at a high level, I would say we still expect that sort of spiky pattern in Q3, but with respect to any recent new deal, I'm not necessarily going to say that, that makes it any more prominent.

And we'll take our next question from Ralph Schackart with William Blair.

Two questions, if I could. First, can you just maybe give us an update on how the conversations have evolved with potential handset OEMs adopting Dolby Vision after Apple's recent announcement? And then, secondly, the reallocation of resources initiative, how should we think about that going forward? Is that sort of an ongoing process or something that was sort of a onetime event?

Sure. So as it relates to Dolby Vision in mobile devices, of course, we've been saying throughout 2017 that it was a goal of ours to bring Dolby Vision experiences to devices outside of televisions. We couldn't be more excited about Apple adopting it so broadly. And I think that, that is a big step forward in the robustness of the Dolby Vision ecosystem. And I would say that, that's a positive across our discussions with all potential Dolby Vision partners. And as relates to the resource reallocation, yes, I would say that certainly every year and, I guess, as a matter of course throughout the year, we're always looking for where there are opportunities or needs to reallocate resources. Clearly, this year that was more than we usually have and that was us taking a hard look given how far we've come with these new initiatives to see what's working well, what's not working well and make sure we make the appropriate adjustments to continue to accelerate our success with those initiatives. And I would also say that, we have a lot of -- we have a great pipeline of innovation. And I think the more we establish ourselves as a company that is providing audio and visual experiences in entertainment and communications, we see a lot of opportunities. So this also gave us an opportunity to allocate some resources toward some of the more promising initiatives.

And we'll take our next question from Jim Goss with Barrington Research.

I was wondering with Vision and Atmos, beyond the theater sector, cinema sector, do you try to sell them together versus a product or is it just whichever will sell in a certain application?

Yes. Great question, Jim. I would say we always go in looking to sell the full Dolby experience. And so in our dream world everybody would out of the gate launch with Dolby Vision and Dolby Atmos, and they'd deliver Dolby Atmos over AC-4, and everybody would start that way. So we always begin our engagements with the entire proposition in mind. Now, of course, depending on where partners are, what their priorities are, it is often the case as you've seen that they will start with one or the other and evolve into both. And so it's a natural evolution. But I think increasingly as [ each ] begins to scale and each have ecosystem strength of their own, we will look to bring the complete experience to life as quickly as we can.

And you've talked about Vision, maybe moving beyond the premium applications to a broader application in TVs. With Atmos, you mentioned sound bars. Is that pretty much the game right now or are there more applications with traditional receivers and discreet speakers and that sort of thing?

We have pretty good penetration at the receiver market, which is really, I guess, that you might say that's the highest end of the market. And the success we've had this year is bringing that beyond the high end home theater market into sound bars. Most of them are still pretty high in sound bars, but I think we've seen price points as low as $500. And so that's still a big opportunity, because we still see the opportunity to bring that experience to a much broader range of sound bars and beyond. We saw some great examples this year of PCs coming to market with Dolby Atmos. Last quarter, we announced the MateBook from Huawei, where we also participated in the design of the audio hardware and layout. It's really spectacular sounding. So we still see a lot of opportunity to expand Dolby Atmos to a much wider range of used cases, and this year was a big step forward in that.

Okay. And the last, just a general question. Do you think the royalty rates for this generation of technologies are similar or higher or lower than the prior generations of technologies? Is there a way to compare from one set of pricing pressures and systems to the next?

Jim, this is Lewis. I think it would be difficult to make any one general characterization. In fact, if anything, I would step above the notion of royalty rates and point towards one of the things we've done to expand our revenue opportunity is to get into different business models. So for example, the revenue that we're getting from Dolby Cinema doesn't even have to do with a royalty rate. It's revenue share for tickets that are being sold. So it's really hard to say all the royalty rates are higher or lower, and you're seeing us being adopted in a much broader range of devices to ranging from dongles that go into TVs, to sound bars to PCs. So I think it's very difficult to make any one comment about ASPs as becoming less of a single factor.

And we'll take our next question from Paul Chung with JPMorgan.

Can you just talk about the dynamics going on in the broadcast segment? You mentioned that fiscal year '18 will be flat to up. If you think about Vision on TVs and now IPTV set-top boxes, I mean, your wallet share of premium it should be increasing on top of your existing audio solution. So why the modest guide on what seems to be an easier comp and how have the dynamics really changed since fiscal year '16? We saw big step-up in revenues and then fiscal year '17 and now '18 guide is expected to be flattish?

Hey, Paul, that has to be the longest question on record. So why don't I start off to [indiscernible] and then I'll turn it over to Kevin to talk about the business dynamics, because we feel great about our broadcast business, and that is a very valuable part of this company. But a lot of innovation happening there is probably underestimated by people. But in fiscal '18, we've got a couple of dynamics you cited. One, we have organic growth coming from some of our imaging technologies which flow through broadcast because it doesn't all flow through broadcast, but we also have a year where we're currently projecting recoveries to be down and that's offsetting some of that. But then, beyond that, let me turn it over to Kevin to talk about some of the dynamics we see in the offerings. And I think even Kevin, you mentioned in your comments that there was an IPTV set-top box that just got announced and we see more of those things coming in the future. So...

Yes, I mean, I've talked quite a lot about our presence on televisions. We're excited about the Huawei set-top box. That's the first set-top box to go-to-market. Again, I would point out that these are early days and they tend to be premium SKUs. So you're not talking about the high volume SKUs. It's certainly -- we certainly plan on getting into more higher-volume SKUs this year. But in comparison to the audio side of the business, where we're at scale, as Lewis said, there is some dynamics in the recoveries this year that are offsetting the growth we're seeing out of Dolby Vision. But in the long haul, we see a very significant opportunity for growth in Dolby Vision. And as I said earlier, we're still making good progress in those developed markets around the world that are still coming up the curve on even high definition and Dolby Audio to go along with that. So yes, this is the year where, as Lewis said, on any given year, the recovery side of the business can shift from one segment to another, and this is a case where the reason broadcast is not up as much as we might otherwise expect or be used to is offsetting the growth we're seeing from Dolby Vision.

Got you. And then on the $60 million split and the new initiative revenues. Can you confirm the split between Vision, Cinema and Voice and maybe if you can rank order your growth expectations near term for those 3 initiatives.?

Paul, I suppose I could confirm it if we ever gave it, but we don't ever really split that out. But we will say that all 3 of those legs of the stool did contribute to growth for the year. So what we look forward to do is someday all those being big enough to break out separately. But right now, we don't. Within $60 million number, we're not at liberty to break that out -- that fine of a detail.

[Operator Instructions] We'll take a follow-up question from Steve Frankel with Dougherty.

Kevin, I wonder if you might give us an update on timing of ATSC 3.0 rollout in the States, and then AC-4 adoption among customers globally?

Sure. As you know, AC-4 has been included in the ATSC 3.0 specification. I believe that there are meetings coming up very soon seeing whether they can accelerate the adoption, and so that's an ongoing process. But in the meantime, just as importantly, we have been and continue to be focused on getting wins in the market. We have a number of TV providers, including Samsung and LG, which are shipping AC-4. We had a number of trials this year and some live streams, live broadcasts using AC-4. So historically, it's just as important to be working with as we are, the major pay-TV operators, and getting these units and these experiences into market quickly. Often times, we're centering that around large events, sports championships and Olympic opening ceremonies and those sorts of things. And all that's coming along really nicely. And we're optimistic that, that ATSC 3.0 specification will become adopted quickly. Either way, it has, I think, it's certainly influential in terms of people looking at that -- at those specifications as the way of the future.

Okay. And then on HDR 10-plus. What are you hearing from your customers or people that you've talked to, that aren't your customers yet about that? And does it impact the decision tree when they are looking at maybe adopting Dolby Vision and then you've got this HDR 10/HDR 10-plus effort that's out there?

Yes, so far we've seen the press releases. I think our take on it is that it affirmed something that we've always believed, which is the importance of having metadata as a way of optimizing this experience. And in the case of Dolby Vision, as you know, we're able to identify what the capabilities of the television are and optimize the Dolby Vision strain for those capabilities, so that you're not stretching or shrinking the content. So -- and Dolby Vision is a robust ecosystem of content, service providers and OEMs. And it's still not completely clear as to whether anybody, any competing methodologies to what degree that's a specification or how that ecosystem will be supported and built out. But in the meantime, in Dolby Vision, we have the highest quality solution with a robust ecosystem and is growing. So we just continue to be focused on that.

And it appears there are no further questions at this time. I'd like to turn the conference back over to Kevin for any additional remarks.

Great. Well, I want to thank everybody for joining us today. And we look forward to talking to you again soon. Thank you.

And once again, that concludes today's presentation. We thank you all for your participation. And you may now disconnect.