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Leases | 12 Months Ended
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Sep. 26, 2025
Leases [Abstract] |
Leases | Leases As Lessee As a lessee, we enter into contracts to access and utilize office space, including those payable to our principal stockholder and portions attributable to the noncontrolling interests in our consolidated subsidiaries. We determine if a contract contains a lease based on whether we have the right to obtain substantially all of the economic benefits from the use of an identified asset and whether we have the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which we do not own. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our IBR, because the interest rate implicit in our leases is not readily determinable. The IBR is a hypothetical rate based on our understanding of what our credit rating would be and resulting interest we would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments are included in our lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred. The lease term of operating leases vary from less than one year to 10 years. We have leases that include one or more options to extend the lease term for up to 5 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. The components of lease expense were as follows (in thousands):
| Fiscal Year Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Lease cost |  |  |  |  |
Operating lease cost | $ | 13,075 |  |  | $ | 14,275 |  |  | $ | 14,860 |
Variable lease cost | 2,015 |  |  | 1,947 |  |  | 1,424 |
Total lease cost | $ | 15,090 |  |  | $ | 16,222 |  |  | $ | 16,284 |
Supplemental cash flow information related to leases was as follows (in thousands):
| Fiscal Year Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Other information |  |  |  |  |
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 14,862 |  |  | $ | 15,602 |  |  | $ | 16,589 |
Right-of-use assets obtained in exchange for operating lease obligations | 4,731 |  |  | 21,087 |  |  | 16,259 |
Supplemental balance sheet information related to leases was as follows:
| September 26, 2025 |  | September 27, 2024
Operating Leases |  |  |
Weighted-average remaining lease term | 4.8 years |  | 5.3 years
Weighted-average discount rate | 6.0 | % |  | 5.4 | %
The following table presents the maturity analysis of lease liabilities (in thousands):
| September 26, 2025 |  |
| Operating Leases |  |
Fiscal 2026 | $ | 12,306 |  |  |
Fiscal 2027 | 9,299 |  |  |
Fiscal 2028 | 8,071 |  |  |
Fiscal 2029 | 6,114 |  |  |
Fiscal 2030 | 3,400 |  |  |
Thereafter | 5,595 |  |  |
Total undiscounted lease payments | 44,785 |  |  |
Less: imputed interest | (5,907) |  |  |
Total lease liabilities | $ | 38,878 |  |  |
As Lessor As a lessor, we lease our Dolby Cinema product solution to exhibitors. The terms of these leases are typically 10 years. Lease components consist of fixed payments and/or variable lease payments based on contracted percentages of revenue. Generally, leases do not grant any right to the lessee to purchase the underlying asset at the end of the lease term. Dolby Cinema lease arrangements have options to extend the lease term at expiration by increments ranging from 1 to 5 years. Assets provided under an operating lease are carried at cost within property, plant, and equipment, net on the consolidated balance sheets, and depreciated over the useful life of the asset using the straight-line method. Fixed operating lease payments are recognized on a straight-line basis over the lease term to revenue. Variable lease payments received under our Dolby Cinema operating leases are computed as shares of lessees' box office revenue and recognized to revenue in the period that box office sales occur. Lease incentive payments we make to lessees are amortized as a reduction in revenue over the lease term. The components of lease income were as follows (in thousands):
|  |  | Fiscal Year Ended
|  |  |  |  | September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Operating Lease Income |  |  |  |  |  |  |  |  |
Variable operating lease income |  |  |  |  | $ | 36,828 |  |  | $ | 31,794 |  |  | $ | 33,921 |
Fixed operating lease income |  |  |  |  | 4,294 |  |  | 3,570 |  |  | 3,253 |
If a lease is classified as a sales-type lease, the carrying amount of the asset is derecognized from property, plant, and equipment, net, and a net investment in the lease is recorded. The net investment in the lease is measured at commencement date as the sum of the lease receivable and the estimated residual value of the equipment. The unguaranteed residual value of the equipment is determined as the estimated carrying value of the asset at the end of the lease term had the asset been depreciated on a straight-line basis. The unguaranteed residual value of sales-type leases was $0.5 million and $0.9 million as of September 26, 2025 and September 27, 2024, respectively. Selling profit or loss arising from a sales-type lease is recorded at lease commencement and presented on a gross basis. Over the term of the lease, we recognize interest income on the net investment in the lease, and variable lease payments, which are not included in the net investment in the lease. The variable lease payments are not material. The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
| September 26, 2025
| Operating Leases |  | Sales-Type Leases
Fiscal 2026 | $ | 932 |  |  | $ | 220 |
Fiscal 2027 | — |  |  | 220 |
Fiscal 2028 and thereafter | — |  |  | 220 |
Total undiscounted cash flows | $ | 932 |  |  | 660 |
Less: Carrying value of lease receivables |  |  | — |
Difference |  |  | $ | 660 |
Leases | Leases As Lessee As a lessee, we enter into contracts to access and utilize office space, including those payable to our principal stockholder and portions attributable to the noncontrolling interests in our consolidated subsidiaries. We determine if a contract contains a lease based on whether we have the right to obtain substantially all of the economic benefits from the use of an identified asset and whether we have the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which we do not own. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our IBR, because the interest rate implicit in our leases is not readily determinable. The IBR is a hypothetical rate based on our understanding of what our credit rating would be and resulting interest we would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments are included in our lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred. The lease term of operating leases vary from less than one year to 10 years. We have leases that include one or more options to extend the lease term for up to 5 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. The components of lease expense were as follows (in thousands):
| Fiscal Year Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Lease cost |  |  |  |  |
Operating lease cost | $ | 13,075 |  |  | $ | 14,275 |  |  | $ | 14,860 |
Variable lease cost | 2,015 |  |  | 1,947 |  |  | 1,424 |
Total lease cost | $ | 15,090 |  |  | $ | 16,222 |  |  | $ | 16,284 |
Supplemental cash flow information related to leases was as follows (in thousands):
| Fiscal Year Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Other information |  |  |  |  |
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 14,862 |  |  | $ | 15,602 |  |  | $ | 16,589 |
Right-of-use assets obtained in exchange for operating lease obligations | 4,731 |  |  | 21,087 |  |  | 16,259 |
Supplemental balance sheet information related to leases was as follows:
| September 26, 2025 |  | September 27, 2024
Operating Leases |  |  |
Weighted-average remaining lease term | 4.8 years |  | 5.3 years
Weighted-average discount rate | 6.0 | % |  | 5.4 | %
The following table presents the maturity analysis of lease liabilities (in thousands):
| September 26, 2025 |  |
| Operating Leases |  |
Fiscal 2026 | $ | 12,306 |  |  |
Fiscal 2027 | 9,299 |  |  |
Fiscal 2028 | 8,071 |  |  |
Fiscal 2029 | 6,114 |  |  |
Fiscal 2030 | 3,400 |  |  |
Thereafter | 5,595 |  |  |
Total undiscounted lease payments | 44,785 |  |  |
Less: imputed interest | (5,907) |  |  |
Total lease liabilities | $ | 38,878 |  |  |
As Lessor As a lessor, we lease our Dolby Cinema product solution to exhibitors. The terms of these leases are typically 10 years. Lease components consist of fixed payments and/or variable lease payments based on contracted percentages of revenue. Generally, leases do not grant any right to the lessee to purchase the underlying asset at the end of the lease term. Dolby Cinema lease arrangements have options to extend the lease term at expiration by increments ranging from 1 to 5 years. Assets provided under an operating lease are carried at cost within property, plant, and equipment, net on the consolidated balance sheets, and depreciated over the useful life of the asset using the straight-line method. Fixed operating lease payments are recognized on a straight-line basis over the lease term to revenue. Variable lease payments received under our Dolby Cinema operating leases are computed as shares of lessees' box office revenue and recognized to revenue in the period that box office sales occur. Lease incentive payments we make to lessees are amortized as a reduction in revenue over the lease term. The components of lease income were as follows (in thousands):
|  |  | Fiscal Year Ended
|  |  |  |  | September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Operating Lease Income |  |  |  |  |  |  |  |  |
Variable operating lease income |  |  |  |  | $ | 36,828 |  |  | $ | 31,794 |  |  | $ | 33,921 |
Fixed operating lease income |  |  |  |  | 4,294 |  |  | 3,570 |  |  | 3,253 |
If a lease is classified as a sales-type lease, the carrying amount of the asset is derecognized from property, plant, and equipment, net, and a net investment in the lease is recorded. The net investment in the lease is measured at commencement date as the sum of the lease receivable and the estimated residual value of the equipment. The unguaranteed residual value of the equipment is determined as the estimated carrying value of the asset at the end of the lease term had the asset been depreciated on a straight-line basis. The unguaranteed residual value of sales-type leases was $0.5 million and $0.9 million as of September 26, 2025 and September 27, 2024, respectively. Selling profit or loss arising from a sales-type lease is recorded at lease commencement and presented on a gross basis. Over the term of the lease, we recognize interest income on the net investment in the lease, and variable lease payments, which are not included in the net investment in the lease. The variable lease payments are not material. The following table presents the maturity analysis of fixed lease payments due to Dolby (in thousands):
| September 26, 2025
| Operating Leases |  | Sales-Type Leases
Fiscal 2026 | $ | 932 |  |  | $ | 220 |
Fiscal 2027 | — |  |  | 220 |
Fiscal 2028 and thereafter | — |  |  | 220 |
Total undiscounted cash flows | $ | 932 |  |  | 660 |
Less: Carrying value of lease receivables |  |  | — |
Difference |  |  | $ | 660 |

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