• Fourth quarter GAAP revenue of $68.5 million; revenue under ASC 605 would have been $102.0 million, in line with expectations; $35.1 million in cash provided by operating activities
  • Record product revenue in 2018 for IP cores and server DIMM chips with wins at Tier 1 customers in data center and communications segments worldwide
  • CryptoManager platform selected to securely provision Authenta™ secure memory product line at Micron

SUNNYVALE, Calif. – January 28, 2019 – Rambus Inc. (NASDAQ:RMBS) today reported financial results for the fourth quarter ended December 31, 2018 under GAAP Accounting Standards Codification Topic 606 (“ASC 606”), which superseded the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC 605”) that was previously applicable. Rambus also reported financial results as they would have been presented under ASC 605. This ASC 605 presentation is required under the modified retrospective transition method that Rambus has chosen to adopt under ASC 606. Rambus notes that this presentation allows a more relevant comparability with prior results, which were all reported under ASC 605.

Luc Seraphin, chief executive officer of Rambus said, “Rambus had a strong fourth quarter and solid year overall, with continued execution from our product teams and record annual revenue for IP cores and server DIMM chips. As we refocus our product portfolio around our core strengths in semiconductor, improve operational efficiency, and continue to generate cash from operations, we align the company for profitable growth.”

Fourth Quarter and Fiscal Year 2018 Financial Highlights
(In millions, except per share amounts)Three Months Ended December 31, 2018Year Ended December 31, 2018
ASC 606ASC 605 (1)ASC 606ASC 605 (1)
GAAPNon-GAAP (2)GAAPNon-GAAP (2)GAAPNon-GAAP (2)GAAPNon-GAAP (2)
Revenue$68.5$68.5$102.0$102.0$231.2$231.2$401.1$401.1
Diluted net income (loss) per share$(0.02)$0.09$0.23$0.28$(1.46)$(0.06)$(0.14)$0.92

(1) As noted above, Rambus is presenting the financial results under ASC 606 along with the results that would have been applicable under ASC 605. The ASC 605 information should be considered in addition to, not as a substitute for, nor superior to or in isolation from, the financial information prepared in accordance with ASC 606

(2)  See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis.

Business Review

For the Rambus IP cores and Server DIMM chipset businesses, 2018 saw sustained technology leadership in the market, growing customer traction and record revenue. Our DDR4 server DIMM chip business met its revenue targets for the quarter and year and continues to gain market share. With an increasing number of OEM qualifications in the existing server platform and more than double for the upcoming advanced performance CPU refresh, the buffer chip remains poised for growth in 2019. In addition to the steady growth in DDR4, we maintain our leadership position for next-generation DDR5 memory buffer chips and are now shipping customer samples at the top-end speeds for both the RCD and DB chips.

Rambus high-speed IP cores business has been growing at an impressive compound annual growth rate of greater than 50% over the past four years. We continue to gain traction in high-growth, high-performance applications including artificial intelligence, machine learning, graphics, wired switches, and wireless infrastructure. We closed out the year with record revenue fueled by wins with Tier 1 customers in data center and communications segments worldwide. We continued our leadership position in high-end and high-bandwidth SerDes and memory IP cores in advanced process nodes with the tape out of the industry’s first GDDR6 memory PHY in a leading-edge process node. In Q4, we closed a substantial number of design wins with top tier customers worldwide, which sets us up nicely for healthy growth to continue in 2019.

Moving over to our Cryptography business, 2018 saw the importance of semiconductor device-level security grow in the industry, resulting in increased traction and opportunities for our embedded security cores and provisioning capabilities in market segments like IoT, automotive, networking and government. We launched the programmable CryptoManager Root of Trust, which combines our deep security expertise with a modern open architecture, RISC-V, to create an easy-to-consume, secure processing core and have numerous engagements in the semiconductor ecosystem. In Q4, we announced that our CryptoManager platform will be used to securely provision Micron Authenta™ based secure memory. This is a key milestone as it showcases our ability to combine our device-level provisioning solutions with 3rd-party cores to extend our market share and enable a new level of protection for connected devices.

Quarterly Financial Review – GAAPThree Months Ended December 31,
(In millions, except for percentages and per share amounts)20182017
As Reported ASC 606Adjustments (1)ASC 605 (1)As Reported ASC 605
Revenue
Royalties$45.4$31.3$76.7$77.9
Product revenue11.50.411.98.5
Contract and other revenue11.61.813.415.5
Total revenue$68.5$33.5$102.0$101.9
Total operating costs and expenses$72.8$$72.8$86.2
Operating income (loss)$(4.3)$33.5$29.2$15.7
Operating margin(6)%35%29%15%
Net income (loss)$(2.0)$27.2$25.2$(36.2)
Diluted net income (loss) per share$(0.02)$0.25$0.23$(0.33)
Licensing billings (2)$76.7$$76.7$76.6
Net cash provided by operating activities$35.1$$35.1$59.8

(1) As noted above, Rambus is presenting the ASC 606 results together with the adjustments made to reconcile the ASC 606 presentation to the results that would have been applicable under ASC 605. The ASC 605 information should be considered in addition to, not as a substitute for, nor superior to or in isolation from, the financial information prepared in accordance with ASC 606.

(2)  Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences.

Quarterly Financial Review – Non-GAAP (1)Three Months Ended December 31,
(In millions, except for percentages and per share amounts)20182017
As Reported ASC 606Adjustments (2)ASC 605 (2)As Reported ASC 605
Revenue
Royalties$45.4$31.3$76.7$77.9
Product revenue11.50.411.98.5
Contract and other revenue11.61.813.415.5
Total revenue$68.5$33.5$102.0$101.9
Total operating costs and expenses$61.6$$61.6$68.4
Operating income$6.9$33.5$40.4$33.5
Operating margin10%30%40%33%
Net income$9.6$20.7$30.3$21.2
Diluted net income per share$0.09$0.19$0.28$0.19

 

(1)  See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis.

(2)  See note (1) under “Quarterly Financial Review-GAAP” above for a description of the Adjustments and ASC 605 presentations.

Revenue for the quarter was $68.5 million, above the high end of our expectations, due to the structure of our licensing agreements signed within the quarter. Revenue under ASC 605 would have been $102.0 million, at the mid-point of our expectations. Revenue for the year ended December 31, 2018 under ASC 605 was 6% higher than a year ago excluding the impact of the Lighting Division which was wound down in the first quarter of 2018. We had GAAP total operating costs and expenses of $72.8 million and non-GAAP total operating costs and expenses of $61.6 million, at the bottom of our expectations due to our refocus on our core semiconductor business. We also had GAAP and non-GAAP diluted net income (loss) per share of ($0.02) and $0.09, respectively. Total GAAP and non-GAAP diluted net income per share under ASC 605 would have been $0.23 and $0.28, respectively, at the high end of our expectations.

For the year ended December 31, 2018, we had GAAP diluted net loss per share under ASC 605 of $0.14. We also had non-GAAP diluted net income per share under ASC 605 of $0.92, which was 35% higher than a year ago.

Cash, cash equivalents, and marketable securities as of December 31, 2018 were $277.8 million, an increase of $29.6 million from September 30, 2018, mainly due to $35.1 million in cash provided by operating activities. Adjusted EBITDA under ASC 605 for the quarter would have been $43.0 million.

2019 First Quarter Outlook

The Company will discuss revenue guidance for the first quarter of 2019 during its upcoming conference call. The following table sets forth first quarter outlook for other measures.

(In millions)GAAPNon-GAAP (1)
Total operating costs and expenses$78 – $74$66 – $62
Interest and other income (expense), net$3($1)
Diluted share count110110

(1)  See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below.

For the first quarter of 2019, the Company expects operating costs and expenses to be between $78 million and $74 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $66 million and $62 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($1 million), tax rate of 24% (refer to non-GAAP financial information below – income tax adjustments) and diluted share count of 110 million, and exclude stock-based compensation expense ($7 million), amortization expense ($5 million) and non-cash interest expense on convertible notes ($2 million).

Conference Call:

Rambus management will discuss the results of the quarter during a conference call scheduled for 2:00pm PT today. The call, audio and slides will be available online at investor.rambus.com and a replay will be available for the next week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID# 8397247.

Non-GAAP Financial Information:

In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: operating costs and expenses, operating margin, operating income (loss), net income (loss) and, diluted net income (loss) per share, presented both under ASC 606 and as they would have been presented under ASC 605. In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release.

The Company’s non-GAAP financial measures reflect adjustments based on the following items:

Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies.

Acquisition-related transaction costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current periods’ portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods.

Restructuring charges. These charges may consist of severance, contractual retention payments, exit costs and other charges and are excluded because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

Amortization expense. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business.

Loss on extinguishment of debt. The Company has excluded loss on extinguishment of debt as this represents a cost of refinancing its existing convertible notes and is not a reflection of the Company’s ongoing operations.

Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations.

Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 24 percent for both 2019 and 2018, and 35 percent for 2017, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied these tax rates to its non-GAAP financial results for all periods in the relevant years to assist the Company’s planning. The Company has provided below a reconciliation of its GAAP provision for income taxes and GAAP effective tax rate to the assumed non-GAAP provision for income taxes and non-GAAP effective tax rate.

On occasion in the future, there may be other items, such as significant gains or losses from contingencies that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management.

Forward-Looking Statements

This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 including those relating to Rambus’ expectations regarding product and service offerings, future profit and growth and financial guidance for the first quarter of 2019, including operating costs and expenses, and estimated, fixed, long-term projected tax rates, both on a GAAP and non-GAAP basis as appropriate. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by Rambus’ management. Actual results may differ materially. Rambus’ business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission. Rambus undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

 

December 31,December 31,
20182017
ASSETS
Current assets:
Cash and cash equivalents$115,924$225,844
Marketable securities161,840103,532
Accounts receivable50,86325,326
Unbilled receivables176,613566
Inventories6,7725,159
Prepaids and other current assets15,73811,317
Total current assets527,750371,744
Intangible assets, net59,93691,722
Goodwill207,178209,661
Property, plant and equipment, net57,02854,303
Deferred tax assets4,435159,099
Unbilled receivables, long-term497,003
Other assets7,8254,543
Total assets$1,361,155$891,072
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$7,392$9,614
Accrued salaries and benefits16,93817,091
Deferred revenue19,37418,272
Income taxes payable, short-term16,390258
Convertible notes, short-term78,451
Other current liabilities9,1919,156
Total current liabilities69,285132,842
Long-term liabilities:
Convertible notes, long-term141,934135,447
Long-term imputed financing obligation36,29737,262
Long-term income taxes payable77,2803,344
Deferred tax liabilities18,9609,830
Other long-term liabilities5,287763
Total long-term liabilities279,758186,646
Total stockholders’ equity1,012,112571,584
Total liabilities and stockholders’ equity$1,361,155$891,072

 

Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

 

 

Three Months Ended

December 31,

Year Ended

December 31,

2018201720182017
Revenue:
Royalties$45,430$77,861$130,452$289,594
Product revenue11,5378,54338,69036,509
Contract and other revenue11,59615,48762,05966,993
Total revenue68,563101,891231,201393,096
Operating costs and expenses:
Cost of product revenue (1)4,3675,90118,29923,783
Cost of contract and other revenue6,23912,09035,40255,364
Research and development (1)37,39539,417158,339149,135
Sales, general and administrative (1)24,76828,818103,911110,940
Restructuring charges (recoveries)(6)2,217
Gain from sale of intellectual property(54)(533)
Total operating costs and expenses72,76386,172318,168338,689
Operating income (loss)(4,200)15,719(86,967)54,407
Interest income and other income (expense), net7,24889332,6211,384
Loss on extinguishment of debt(1,082)(1,082)
Interest expense(3,251)(3,966)(16,282)(13,720)
Interest and other income (expense), net3,997(4,155)16,339(13,418)
Income (loss) before income taxes(203)11,564(70,628)40,989
Provision for income taxes1,81547,73287,32963,851
Net loss$(2,018)$(36,168)$(157,957)$(22,862)
Net loss per share:
Basic$(0.02)$(0.33)4(1.46)$(0.21)
Diluted$(0.02)$(0.33)$(1.46)$(0.21)
Weighted average shares used in per share calculation
Basic108,826109,737108,450110,198
Diluted108,826109,737108,450110,198

_________

(1) Total stock-based compensation expense for the three months and years ended December 31, 2018 and 2017 are presented as follows:

Three Months Ended

December 31,

Year Ended

December 31,

2018201720182017
Cost of product revenue$1$25$8$78
Research and development$2,920$3,137$12,582$12,185
Sales, general and administrative$3,224$4,072$9,146$15,140

 

 

Rambus Inc.
Supplemental Annual Financial Review
(In millions, except per share amounts)
(Unaudited)

 

Annual Financial Review – GAAPYear Ended December 31,
(In millions, except for percentages and per share amounts)20182017
As Reported ASC 606Adjustments (1)ASC 605 (1)As Reported ASC 605
Revenue$231.2$169.9$401.1$393.1
Total operating costs and expenses$318.2$$318.2$338.7
Operating income (loss)$(87.0)$169.9$82.9$54.4
Operating margin(38)%58%21%14%
Net income (loss)$(157.9)$142.6$(15.3)$(22.9)
Diluted net income (loss) per share$(1.46)$1.32$(0.14)$(0.21)
Net cash provided by operating activities$87.1$$87.1$117.4

 

(1) See note (1) under “Quarterly Financial Review-GAAP” above for a description of the Adjustments and ASC 605 presentations.

 

Annual Financial Review – Non-GAAP (1)Year Ended December 31,
(In millions, except for percentages and per share amounts)20182017
As Reported ASC 606Adjustments (2)ASC 605 (2)As Reported ASC 605
Revenue$231.2$169.9$401.1$393.1
Total operating costs and expenses$264.8$$264.8$269.1
Operating income (loss)$(33.6)$169.9$136.3$124.0
Operating margin(15)%49%34%32%
Net income (loss)$(6.1)$108.4$102.3$77.5
Diluted net income (loss) per share$(0.06)$0.98$0.92$0.68

(1)  See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis.

(2)  See note (1) under “Quarterly Financial Review-GAAP” above for a description of the Adjustments and ASC 605 presentations.

Rambus Inc.
Supplemental Revenue and Licensing Billings
(In thousands)
(Unaudited)

2018 Revenue under ASC 606
Quarter endedYear ended
December 31, 2018September 30, 2018June 30, 2018March 31, 2018December 31, 2018
Revenue
Royalties$45,430$33,599$30,049$21,374$130,452
Product revenue11,53711,7538,0877,31338,690
Contract and other revenue11,59614,40218,32217,73962,059
Total revenue$68,563$59,754$56,458$46,426$231,201

 

2018 Revenue under ASC 605 and Licensing Billings
Quarter endedYear ended
December 31, 2018September 30, 2018June 30, 2018March 31, 2018December 31, 2018
Revenue
Royalties$76,717$75,704$73,626$77,174$303,221
Product revenue11,86711,7538,2217,55639,397
Contract and other revenue13,39812,38316,97315,72958,483
Total revenue$101,982$99,840$98,820$100,459$401,101
Licensing billings (1)$76,717$75,374$73,210$75,924$301,225

 

2017 Revenue under ASC 605 and Licensing Billings
Quarter endedYear ended
December 31, 2017September 30, 2017June 30, 2017March 31, 2017December 31, 2017
Revenue
Royalties$77,861$72,787$69,990$68,956$289,594
Product revenue8,5438,6618,40110,90436,509
Contract and other revenue15,48717,68616,32917,49166,993
Total revenue$101,891$99,134$94,720$97,351$393,096
Licensing billings (1)$76,611$71,537$72,890$68,556$289,594

 

2016 Revenue under ASC 605 and Licensing Billings
Quarter endedYear ended
December 31, 2016September 30, 2016June 30, 2016March 31, 2016December 31, 2016
Revenue
Royalties$70,604$68,298$62,835$62,877$264,614
Product revenue11,7467,0923,9023,31226,052
Contract and other revenue15,20914,4659,7646,49345,931
Total revenue$97,559$89,855$76,501$72,682$336,597
Licensing billings (1)$64,854$71,548$66,604$61,683$264,689

 

(1)  Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences.

Rambus Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands)
(Unaudited)

 

Three Months Ended December 31,Year Ended December 31,
ASC 606ASC 605ASC 606ASC 605
201820182017201820182017
Operating costs and expenses$72,763$72,763$86,172$318,168$318,168$338,689
Adjustments:
Stock-based compensation expense(6,145)(6,145)(7,234)(21,736)(21,736)(27,403)
Acquisition-related transaction costs and retention bonus expense(30)(70)(70)(248)
Amortization expense(4,989)(4,989)(10,526)(29,341)(29,341)(41,962)
Restructuring charges (recoveries)66(2,217)(2,217)
Non-GAAP operating costs and expenses$61,635$61,635$68,382$264,804$264,804$269,076
Operating income (loss)$(4,200)$29,219$15,719$(86,967)$82,933$54,407
Adjustments:
Stock-based compensation expense6,1456,1457,23421,73621,73627,403
Acquisition-related transaction costs and retention bonus expense307070248
Amortization expense4,9894,98910,52629,34129,34141,962
Restructuring charges (recoveries)(6)(6)2,2172,217
Non-GAAP operating income (loss)$6,928$40,347$33,509$(33,603)$136,297$124,020
Income (loss) before income taxes$(203)$27,068$11,564$(70,628)$72,037$40,989
Adjustments:
Stock-based compensation expense6,1456,1457,23421,73621,73627,403
Acquisition-related transaction costs and retention bonus expense307070248
Amortization expense4,9894,98910,52629,34129,34141,962
Restructuring charges (recoveries)(6)(6)2,2172,217
Loss on extinguishment of debt1,0821,082
Non-cash interest expense on convertible notes1,6551,6552,2559,2429,2427,579
Non-GAAP income (loss) before income taxes$12,580$39,851$32,691$(8,022)$134,643$119,263
GAAP provision for income taxes1,8151,81547,73287,32987,32963,851
Adjustment to GAAP provision for income taxes1,2047,749(36,290)(89,255)(55,015)(22,109)
Non-GAAP provision for (benefit from) income taxes3,0199,56411,442(1,926)32,31441,742
Non-GAAP net income (loss)$9,561$30,287$21,249$(6,096)$102,329$77,521
Non-GAAP basic net income (loss) per share$0.09$0.28$0.19$(0.06)$0.94$0.70
Non-GAAP diluted net income (loss) per share$0.09$0.28$0.19$(0.06)$0.92$0.68
Weighted average shares used in non-GAAP per share calculation:
Basic108,826108,826109,737108,450108,450110,198
Diluted109,618109,618114,341108,450110,837113,899

Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1)

 

Three Months Ended December 31,Year Ended December 31,
ASC 606ASC 605ASC 606ASC 605
201820182017201820182017
GAAP effective tax rate(894)%7%413%(124)%121%156%
Adjustment to GAAP effective tax rate918%17%(378)%148%(97)%(121)%
Non-GAAP effective tax rate24%24%35%24%24%35%

(1) For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 24 percent for 2018 and 35 percent for 2017, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied these tax rates to its non-GAAP financial results for all periods in the relevant year to assist the Company’s planning for future periods.

Rambus Inc.
Reconciliation of Other GAAP to Non-GAAP Items
(In thousands, except percentages)
(Unaudited)

GAAPNon-GAAP
Three Months Ended December 31,Three Months Ended December 31,
ASC 606ASC 605ASC 606ASC 605
201820182017201820182017
Revenue (i)$68,563$101,982$101,891$68,563$101,982$101,891
Operating income (loss) (ii)(4,200)29,21915,7196,92840,34733,509
Operating margin (ii/i)(6)%29%15%10%40%33%

 

GAAPNon-GAAP
Year Ended December 31,Year Ended December 31,
ASC 606ASC 605ASC 606ASC 605
201820182017201820182017
Revenue (i)$231,201$401,101$393,096$231,201$401,101$393,096
Operating income (loss) (ii)(86,967)82,93354,407(33,603)136,297124,020
Operating margin (ii/i)(38)%21%14%(15)%34%32%

 

Three Months Ended December 31,
ASC 605
20182017
Net income (loss)$25,253$(36,168)
Add back:
Interest and other income (expense), net2,1514,155
Provision for income taxes1,81547,732
Depreciation expense2,6383,304
Amortization expense4,98910,526
EBITDA (1)$36,846$29,549
Adjustments:
Stock-based compensation expense6,1457,234
Acquisition-related transaction costs and retention bonus expense30
Restructuring recoveries(6)
Adjusted EBITDA (2)$42,985$36,813

 

(1)  EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is net income (loss). EBITDA is net income (loss) adjusted for net interest and other income (expense), income taxes, and depreciation and amortization. It should not be considered as an alternative to net income computed under GAAP.

 

(2)  Adjusted EBITDA excludes the impact of other non-GAAP adjustments indicated in the above tables.

 

 

Rambus Inc.
Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates
(In millions)
(Unaudited)

2019 First Quarter OutlookThree Months Ended March 31, 2019
LowHigh
Forward-looking operating costs and expenses$78.1$74.1
Adjustments:
Stock-based compensation expense(6.6)(6.6)
Amortization expense(5.0)(5.0)
Forward-looking Non-GAAP operating costs and expenses$66.5$62.5
Forward-looking interest and other income (expense), net$3.4$3.4
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements(5.7)(5.7)
Non-cash interest expense on convertible notes1.71.7
Forward-looking Non-GAAP interest and other income (expense), net$(0.6)$(0.6)