Investments & Fair Value Measurements

9 Months Ended

Jun. 27, 2025

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Investments and Fair Value Measurements

In general, we use cash holdings to purchase investment-grade securities diversified among security types, industries, and issuers. Our cash and cash equivalents consist of highly-liquid money market funds. Mutual fund investments held in our SERP are classified as trading securities. Derivative contracts are used to hedge currency risk, and these are carried at fair value and classified as other current assets and accrued liabilities in the unaudited interim condensed consolidated balance sheets.

Our cash and investment portfolio consisted of the following (in thousands):


	June 27, 2025
	Cost		Unrealized						Estimated Fair Value
			Gains		Losses		Total		Level 1		Level 2		Level 3
Cash and cash equivalents:
Cash	$	647,548	$	—	$	—	$	647,548	$	647,548	$	—	$	—
Cash equivalents:



Money market funds	51,018		—		—		51,018		51,018		—		—



Cash and cash equivalents	698,566		—		—		698,566		698,566		—		—

Short-term investments:







Marketable equity securities	763		—		—		763		763		—		—
Short-term investments	763		—		—		763		763		—		—

Long-term investments:








Other investments	78,017		—		—		78,017		—		—		—
Long-term investments	78,017		—		—		78,017		—		—		—

Total cash, cash equivalents, and investments	$	777,346	$	—	$	—	$	777,346	$	699,329	$	—	$	—

Investments held in supplemental retirement plan:
Assets	$	5,082	$	—	$	—	$	5,082	$	5,082	$	—	$	—
Included in prepaid expenses and other current assets and other non-current assets
Liabilities	$	5,082	$	—	$	—	$	5,082	$	5,082	$	—	$	—
Included in accrued liabilities and other non-current liabilities





Currency derivatives as hedge instruments:
Assets: Included in other current assets	$	—	$	1,887	$	—	$	1,887	$	—	$	1,887	$	—
Assets: included in other non-current assets	—		371		—		371		—		371		—
Liabilities: Included in other accrued liabilities	—		—		(201)		(201)		—		(201)		—


	September 27, 2024
	Cost		Unrealized						Estimated Fair Value
			Gains		Losses		Total		Level 1		Level 2		Level 3
Cash and cash equivalents:
Cash	$	482,047	$	—	$	—	$	482,047	$	482,047	$	—	$	—







Cash and cash equivalents	482,047		—		—		482,047		482,047		—		—










Long-term investments:







Other investments	89,267		—		—		89,267		—		—		76,000
Long-term investments	89,267		—		—		89,267		—		—		76,000

Total cash, cash equivalents, and investments	$	571,314	$	—	$	—	$	571,314	$	482,047	$	—	$	76,000

Investments held in supplemental retirement plan:
Assets	$	5,044	$	—	$	—	$	5,044	$	5,044	$	—	$	—
Included in prepaid expenses and other current assets and other non-current assets
Liabilities	$	5,044	$	—	$	—	$	5,044	$	5,044	$	—	$	—
Included in accrued liabilities and other non-current liabilities





Currency derivatives as hedge instruments:
Assets: Included in other current assets	$	—	$	299	$	—	$	299	$	—	$	299	$	—

Equity Securities

Our equity securities primarily consist of our equity method investment in Access Advance LLC ("Access Advance") of $64.9 million and $83.9 million as of June 27, 2025 and September 27, 2024, respectively, and equity securities without a readily determinable fair value, valued at $11.8 million and $5.0 million as of June 27, 2025 and September 27, 2024, respectively. The equity method investment and equity securities without a readily determinable value are recorded within short-term and long-term investments in our unaudited interim condensed consolidated balance sheets.

The equity method investment is assessed for impairment, if any, and adjusted for our proportionate share of the investee's net income or loss. Our share of the equity method investee's net income or loss is included in other income/(expense), net on the unaudited interim condensed consolidated statements of operations. Our share of the equity method investee's net income was $3.9 million in the third quarter of fiscal 2025 and was $3.3 million in the third quarter of fiscal 2024. Our share of the equity method investee's net income was $17.2 million in the fiscal year-to-date period ended June 27, 2025 and was $10.2 million in the fiscal year-to-date period ended June 28, 2024.

During the third quarter of fiscal 2025, we reclassified $8.7 million in assets held for sale to short-term and long-term investments. Refer to Note 16, "Business Combinations" for more information.

Fair Value Hierarchy. Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. We minimize the use of unobservable inputs and use observable market data, if available, when determining fair value. We classify our inputs to measure fair value using the following three-level hierarchy:

Level 1: Quoted prices in active markets at the measurement date for identical assets and liabilities. We base the fair value of our Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.

Level 2: Prices may be based upon quoted prices in active markets or inputs not quoted on active markets but are corroborated by market data. We obtain the fair value of our Level 2 financial instruments from a professional pricing service, which may use quoted market prices for identical or comparable instruments, or model driven valuations using observable market data or inputs corroborated by observable market data. To validate the fair value determination provided by our primary pricing service, we perform quality controls over values received which include comparing our pricing service provider’s assessment of the fair values of our investment securities against the fair values of our investment securities obtained from another independent source, reviewing the pricing movement in the context of overall market trends, and reviewing trading information from our investment managers. In addition, we assess the inputs and methods used in determining the fair value in order to determine the classification of securities

in the fair value hierarchy. The fair value of the currency derivatives are calculated from market spot rates, forward rates, interest rates, and credit ratings at the end of the period.

Level 3: Unobservable inputs are used when little or no market data is available and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

Securities In Gross Unrealized Loss Position. We periodically evaluate our investments for impairment by comparing the fair value with the cost basis for each of our investment securities. We had no securities that were in an unrealized loss position as of June 27, 2025 and September 27, 2024, respectively.

Investment Maturities. The following table summarizes the amortized cost and estimated fair value of the cash equivalents within our investment portfolio based on stated maturities as of June 27, 2025, which are recorded within cash and cash equivalents in our unaudited interim condensed consolidated balance sheets (in thousands):



Range of maturity	Amortized Cost		Fair Value
Due within 1 year	$	51,781	$	51,781
Due in 1 to 2 years	—		—
Due in 2 to 5 years	—		—
Total	$	51,781	$	51,781

Dolby Laboratories, Inc. 10-Q