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Rambus Reports Third Quarter 2020 Financial Results

  • Strong quarter, delivering on revenue, exceeding expectations for profit and generating $44.1 million in cash provided by operating activities
  • Memory interface chip quarterly revenue up 39% year over year; on track for over 50% full-year growth
  • Micron DRAM license extended for an additional 4 years
  • New stock repurchase program authorizes repurchase of 20 million shares

SAN JOSE, Calif. – November 2, 2020 – Rambus Inc. (NASDAQ:RMBS), a premier silicon IP and chip provider making data faster and safer, today reported financial results for the third quarter ended September 30, 2020. GAAP revenue for the third quarter was $56.9 million; licensing billings were $63.1 million, product revenue was $29.8 million, and contract and other revenue was $10.5 million. The Company also generated $44.1 million in cash provided by operating activities.

“With our sustained focus on cloud and data center markets, Rambus had a very solid third quarter driven by great execution across our businesses,” said Luc Seraphin, chief executive officer of Rambus. “Our proven track record of cash generation and ability to deliver on revenue and profit makes us well positioned for strong top-line growth in 2021.”

Business Review

The Company’s memory interface chip business had a solid quarter, continuing to significantly outpace market growth with a 39% increase in quarterly revenue year over year. This growth is driven by ongoing increases in market share in DDR4 and continued demand in cloud and data center. For the industry transition to DDR5, Rambus is in a leading position for qualification with the memory ecosystem and CPU partners in next-generation systems.

Growing complexity in SoC design across data center, AI and 5G markets continues to drive customer engagement for the Rambus Silicon IP business, with an increasing number of design wins in interface and security IP. Designed to meet the needs of the most demanding data center AI/ML workloads, Rambus leads the industry with the fastest, silicon-demonstrated HBM2E memory interface solution capable of running up to 4 Gbps.

Lastly, Rambus extended its DRAM license agreement with Micron for an additional four years. The extension maintains the existing financial terms of the agreement, providing Micron with a license to the Company’s extensive portfolio of memory interface patents through December of 2024.

Quarterly Financial Review – GAAP Three Months Ended
September 30,
(In millions, except for percentages and per share amounts) 2020 2019
Revenue
Royalties $16.6 $19.4
Product revenue 29.8 21.4
Contract and other revenue 10.5 16.6
Total revenue $56.9 $57.4
Cost of product revenue $9.7 $7.1
Cost of contract and other revenue $1.3 $2.5
Amortization of acquired intangible assets (included in total cost of revenue) $4.3 $3.0
Total operating expenses (1) $54.2 $67.7
Operating loss $(12.5) $(22.9)
Operating margin (22)% (40)%
Net loss $(12.8) $(17.3)
Diluted net loss per share $(0.11) $(0.16)
Net cash provided by operating activities $44.1 $25.6

 

(1)  Includes amortization of acquired intangible assets of approximately $0.2 million for each of the three months ended September 30, 2020 and 2019.

Quarterly Financial Review – Non-GAAP (including operational metric) (1) Three Months Ended
September 30,
(In millions) 2020 2019
Licensing billings (2) $63.1 $63.1
Product revenue $29.8 $21.4
Contract and other revenue $10.5 $16.6
Cost of product revenue $9.7 $7.1
Cost of contract and other revenue $1.3 $2.5
Total operating expenses $45.7 $57.5
Interest and other income (expense), net $(0.6) $1.0
Diluted share count 116 114

 

(1)  See “Supplemental Reconciliation of GAAP to Non-GAAP Results” table included below. Note that the applicable non-GAAP measures are presented and that revenue, cost of product revenue and cost of contract and other revenue are solely presented on a GAAP basis.

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

GAAP revenue for the quarter was $56.9 million, in line with expectations. The Company also had licensing billings of $63.1 million, product revenue of $29.8 million, and contract and other revenue of $10.5 million. Rambus had total GAAP cost of revenue of $15.3 million and operating expenses of $54.2 million. The Company also had total non-GAAP operating expenses of $56.7 million (which includes non-GAAP cost of revenue), below the low end of its expectations through its cost management actions. Due to the Company’s strong performance and cost management actions, its revenue was in line with expectations and its profit was at the high end of its expectations. The Company had GAAP diluted net loss per share of $0.11. The Company’s basic share count was 114 million shares and its diluted share count would have been 116 million shares.

Cash, cash equivalents, and marketable securities as of September 30, 2020 were $520.2 million, an increase of $34.1 million from June 30, 2020, mainly due to $44.1 million in cash provided by operating activities.

2020 Fourth Quarter Outlook

The Company will discuss its full revenue guidance for the fourth quarter of 2020 during its upcoming conference call. The following table sets forth fourth quarter outlook for other measures.

(In millions) GAAP Non-GAAP (1)
Licensing billings (2) $61 – $67 $61 – $67
Product revenue $18 – $24 $18 – $24
Contract and other revenue $9 – $15 $9 – $15
Total operating costs and expenses $71 – $67 $59 – $55
Interest and other income (expense), net $0 ($1)
Diluted share count 117 117

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

(2) Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences. This metric is the same for both GAAP and non-GAAP presentations.

For the fourth quarter of 2020, the Company expects licensing billings to be between $61 million and $67 million. The Company also expects royalty revenue to be between $12 million and $18 million, product revenue to be between $18 million and $24 million and contract and other revenue to be between $9 million and $15 million. Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for various product sales, solutions licensing among other matters.

The Company also expects operating costs and expenses to be between $71 million and $67 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $59 million and $55 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($1 million), tax rate of 24% and diluted share count of 117 million, and exclude stock-based compensation expense ($7 million), amortization expense ($5 million), non-cash interest expense on convertible notes ($2 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($3 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# 2281104.

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 expenses and interest and other income (expense), net. In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expense, acquisition-related costs and retention bonus expense, restructuring charges, impairment (recovery) of assets held for sale, amortization expense, 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 costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the reported periods’ portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and have no direct correlation to the Company’s operations.

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.

Impairment (recovery) of assets held for sale. These charges consist of non-cash charges (recoveries) to assets held for sale and are excluded because such charges are non-recurring and do not reduce the Company’s liquidity.

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.

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 2020 and 2019, 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.

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 operating results and business opportunities, growth in product and service offerings and product revenue, expected benefits of our merger, acquisition and divestiture activity and related integration, and financial guidance for the fourth quarter of 2020, including licensing billings and revenue estimates, operating costs and expenses, interest and other income (expense), net and estimated, fixed, long-term projected tax rates 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, as well as the potential adverse impacts related to, or arising from, the Novel Coronavirus (COVID-19). 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)

 

 

 September 30,
2020		 December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents $89,475 $102,176
Marketable securities 430,746 305,488
Accounts receivable 33,025 44,039
Unbilled receivables 141,341 184,366
Inventories 14,218 10,086
Prepaids and other current assets 16,229 18,524
Total current assets 725,034 664,679
Intangible assets, net 41,052 54,900
Goodwill 183,222 183,465
Property, plant and equipment, net 59,425 44,714
Operating lease right-of-use assets 29,961 37,020
Deferred tax assets 5,249 4,574
Unbilled receivables, long-term 260,404 343,703
Other assets 4,671 5,931
Total assets $1,309,018 $1,338,986
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $13,323 $9,549
Accrued salaries and benefits 15,719 20,291
Deferred revenue 14,950 11,947
Income taxes payable, short-term 20,008 19,142
Operating lease liabilities 4,576 6,357
Other current liabilities 22,306 18,893
Total current liabilities 90,882 86,179
Long-term liabilities:
Convertible notes, long-term 154,182 148,788
Long-term operating lease liabilities 35,973 39,889
Long-term income taxes payable 45,882 60,094
Deferred tax liabilities 15,139 13,846
Other long-term liabilities 8,714 19,272
Total long-term liabilities 259,890 281,889
Total stockholders’ equity 958,246 970,918
Total liabilities and stockholders’ equity $1,309,018 $1,338,986

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

Three Months Ended
September 30,		 Nine Months Ended
September 30,
2020 2019 2020 2019
Revenue:
Royalties $16,602 $19,448 $53,253 $71,351
Product revenue 29,769 21,377 92,222 46,372
Contract and other revenue 10,544 16,574 35,359 46,357
Total revenue 56,915 57,399 180,834 164,080
Cost of revenue:
Cost of product revenue 9,661 7,108 30,281 17,845
Cost of contract and other revenue 1,267 2,450 4,000 8,268
Amortization of acquired intangible assets 4,336 3,016 13,016 10,686
Total cost of revenue 15,264 12,574 47,297 36,799
Gross profit 41,651 44,825 133,537 127,281
Operating expenses:
Research and development 33,733 41,486 105,085 119,995
Sales, general and administrative 20,182 26,521 64,387 76,835
Amortization of acquired intangible assets 236 170 832 2,409
Restructuring charges — 1,374 836 4,233
Change in fair value of earn-out liability — — (1,800) —
Impairment (recovery) of assets held for sale — (1,853) — 15,137
Total operating expenses 54,151 67,698 169,340 218,609
Operating loss (12,500) (22,873) (35,803) (91,328)
Interest income and other income (expense), net 3,464 6,727 14,435 21,112
Interest expense (2,586) (2,497) (7,721) (7,302)
Interest and other income (expense), net 878 4,230 6,714 13,810
Loss before income taxes (11,622) (18,643) (29,089) (77,518)
Provision for (benefit from) income taxes 1,157 (1,312) 2,454 3,369
Net loss $(12,779) $(17,331) $(31,543) $(80,887)
Net loss per share:
Basic $(0.11) $(0.16) $(0.28) $(0.73)
Diluted $(0.11) $(0.16) $(0.28) $(0.73)
Weighted average shares used in per share calculation
Basic 113,828 111,315 113,437 110,633
Diluted 113,828 111,315 113,437 110,633

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

Three Months Ended
September 30,
2020 2019
Total operating expenses $54,151 $67,698
Adjustments:
Stock-based compensation expense (6,834) (7,388)
Acquisition-related costs and retention bonus expense (1,327) (3,052)
Amortization of acquired intangible assets (236) (170)
Restructuring charges — (1,374)
Recovery of assets held for sale — 1,853
Non-GAAP total operating expenses $45,754  $57,567
Interest and other income (expense), net $878 $4,230
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (3,289) (4,925)
Non-cash interest expense on convertible notes 1,823 1,725
Non-GAAP interest and other income (expense), net $(588) $1,030

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

2020 Fourth Quarter Outlook Three Months Ended
December 31, 2020
Low High
Forward-looking operating costs and expenses $70.7 $66.7
Adjustments:
Stock-based compensation expense (7.0) (7.0)
Amortization of acquired intangible assets

 

 (4.6) (4.6)
Forward-looking Non-GAAP operating costs and expenses $59.1 $55.1
Forward-looking interest and other income (expense), net $0.1 $0.1
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (2.9) (2.9)
Non-cash interest expense on convertible notes 1.8 1.8
Forward-looking Non-GAAP interest and other income (expense), net $(1.0) $(1.0)

Rambus and SK Hynix Extend License Agreement

Agreement extended to 2024

SEOUL, Korea and SUNNYVALE, Calif. – June 18 2015 – SK Hynix Inc. and Rambus Inc. (NASDAQ:RMBS), today announced they have signed an amendment that extends the current agreement between the two companies through July 1, 2024 for use of Rambus memory-related patented innovations in SK Hynix semiconductor products. SK Hynix and Rambus signed the original agreement for a five-year term in June 2013. With this amendment and extension of the agreement for an additional six years, SK Hynix will continue making payments to Rambus averaging $12M per quarter for the next 36 quarters. In addition, SK Hynix has the option to renew the agreement for an additional three-year extension under the existing rate structure. Other terms and details of the agreement are confidential.

“SK Hynix’s decision of taking an early license extension is a proof point of our ability to provide continued value and technology innovation for leading semiconductor companies,” said Dr. Ron Black, president and chief executive officer at Rambus. “This long-term agreement reaffirms our commitment to work collaboratively with customers, and other key players in the semiconductor industry, delivering technology and services that will further strengthen the growth of Rambus.”

Rambus continues to drive innovation in memory and interface designs, creating new technology architectures that address key trends in cloud computing, big data and Internet of Things (IoT). For additional information on Rambus and its memory, interface and security technologies, visit rambus.com.

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Company website: rambus.com
Rambus blog: rambusblog.com
Twitter: @rambusinc
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About Rambus Inc.
Rambus brings invention to market. Our customizable IP cores, architecture licenses, tools, services, and training improve the competitive advantage of our customer’s products while accelerating their time-to-market. Rambus products and innovations capture, secure and move data. For more information, visit rambus.com.

About SK Hynix Inc.
SK Hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (‘DRAM’), Flash memory chips (‘NAND Flash’) and CMOS Image Sensors (‘CIS’) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK Hynix is available at www.skhynix.com.

Rambus Cryptography Research Division Licenses DPA Countermeasures to Thales

Advanced hardware-based security technologies protect against side channel attacks

SUNNYVALE, CA – April 14, 2015 — Rambus Inc. (NASDAQ:RMBS) today announced that its Cryptography Research division has licensed security technologies to Thales e-Security, a leader in information systems and communications security. In this agreement, Thales will integrate DPA Countermeasure technologies developed by Cryptography Research into its line of hardware security modules (HSMs) to protect against side-channel and related attacks. Specific terms of the agreement are confidential.

“Thales’ products are designed to stay ahead of the increasingly pervasive with sophisticated attacks being developed every day,” said Cindy Provin, VP Strategy & Marketing at Thales e-Security. “Protections against side-channel attacks will be an added important element in our robust solutions.”

“We are seeing threats intensify as there are increasing demands to keep keys protected to conduct secure transactions,” said Paul Kocher, chief scientist of the Rambus Cryptography Research division. “Thales is a critical player in the overall security space and this agreement shows their continued commitment to safeguarding information.”

Side channel and DPA attacks are non-invasive attacks that involve monitoring the fluctuating electrical power consumption of a target device and then using advanced statistical methods to derive cryptographic keys and other secrets. Strong countermeasures to these attacks help protect tamper-resistant products used in applications such as banking, pay television, mass transit, secure ID, and wireless telecommunications.

For additional information on DPA Countermeasures or on Cryptography Research, visit cryptography.com.

Follow Rambus
Company website: rambus.com
Rambus blog: rambusblog.com
Twitter: @rambusinc
LinkedIn: www.linkedin.com/company/rambus
Facebook: www.facebook.com/RambusInc

About Cryptography Research
The Rambus Cryptography Research division specializes in embedded security solutions. Our innovative technologies include tamper resistance, content protection, network security, payment and transaction services. Eight billion security products are made annually with our security technology, and systems designed by our scientists and engineers protect hundreds of billions of dollars in revenues every year. Additional information is available at cryptography.com.

About Rambus Inc.
Rambus brings invention to market. Our customizable IP cores, architecture licenses, tools, services, and training improve the competitive advantage of our customer’s products while accelerating their time-to-market. Rambus products and innovations capture, secure and move data. For more information, visit rambus.com.

Intertrust Technologies Integrates CryptoFirewall Cores from Rambus Cryptography Research Division

CryptoFirewall™ core enhances ExpressPlay™ and gives content providers access to higher levels of security

SUNNYVALE, Calif. — April 09, 2015 — Rambus Inc. (NASDAQ:RMBS) today announced that Intertrust® Technologies Corporation, a leading provider of trusted computing technologies, will integrate its CryptoFirewall™ advanced hardware security cores with ExpressPlay™ cloud service. This integration enables Intertrust to provide content distributors with an unprecedented level of hardware security in compatible consumer devices. Smart 4K UHD TVs are the first target devices for this integrated security solution.”

“Security risks are pervasive, so it’s important to have an extremely robust and highly flexible security solution to protect digital rights,” said Talal Shamoon, CEO at Intertrust Technologies. “The technologies developed by the Cryptography Research team have an excellent reputation for securing content, and the CryptoFirewall core complements and reinforces our full range of cloud-based security solutions.”

“As a leading digital TV software-based solution, Intertrust’s ExpressPlay is providing an important layer of the overall security platform,” said Paul Kocher, president and chief scientist of the Rambus Cryptography Research division. “By integrating our hardware cores with Marlin DRM, this solution can provide a robust, flexible, and cost-effective foundation to more effectively protect content and services from theft.”

The CryptoFirewall core, developed by Cryptography Research, is a self-contained ASIC security core that provides an ultra-secure hardware key engine for content protection applications. The core is integrated directly into leading SoCs used in TVs, set-top boxes, and other devices, and provides ‘smart card within a chip’ level end-point security. The core is designed to protect cryptographic keys and computations within a chip even if surrounding components are compromised.

The CryptoFirewall core complements Marlin DRM and helps content distributors meet MovieLab’s Enhanced Content Protection specifications for hardware root of trust. Intertrust jointly developed the specifications for the open standard Marlin DRM system for consumer devices and services with Samsung, Sony, Panasonic and Philips. Marlin offers sophisticated copyright management for playing media content distributed over mobile, broadband, broadcast and other distribution channels. Marlin seamlessly ports licensed content across devices and services in a consumer’s home or personal domain and supports a large and flexible set of business models for content distribution. Marlin is deployed worldwide and is currently one of the fastest growing DRM technology in China.

Intertrust also operates ExpressPlay, a highly scalable cloud service for content protection. The ExpressPlay service provides a complete, ready-to-go Marlin DRM system with a cloud service to easily manage content protection usage, and tools to integrate Marlin into devices and distribution platforms. ExpressPlay DRM supports many video formats including MPEG-DASH HLS, Smooth, and MP4. These standards are important for reducing the cost of video distribution and work with an increasing number of smart TV devices running apps that combine broadcast TV content with the best of Internet content. Intertrust operates ExpressPlay services in China and worldwide.

Follow Rambus
Company website: rambus.com
Rambus blog: rambusblog.com
Twitter: @rambusinc
LinkedIn: www.linkedin.com/company/rambus
Facebook: www.facebook.com/RambusInc

About Cryptography Research
The Rambus Cryptography Research division specializes in embedded security solutions. Our innovative technologies include tamper resistance, content protection, network security, payment and transaction services. Eight billion security products are made annually with our security technology, and systems designed by our scientists and engineers protect hundreds of billions of dollars in revenues every year. Additional information is available at cryptography.com.

About Intertrust Technologies Corporation
Intertrust invents, develops, and delivers technologies for trusted computing among leading global corporations from mobile and CE manufacturers and service providers, to enterprise software platform companies. Intertrust and its subsidiaries are also developing new trust services for vertical markets related to consumer privacy, Internet processing of DNA data, and smart grids. Intertrust also actively creates and invests in ventures that extend its market vision. Current and former portfolio companies include Personagraph, Kabuto, whiteCryption, SyncTV, Nest Labs, Kiora, and Planet OS.

Founded in 1990 on a revolutionary vision to bring trust to operating systems and open networks, Intertrust is based in Silicon Valley, with regional offices in London and Beijing. The Company has a legacy of invention, and its fundamental contributions in the areas of computer security and digital trust are globally recognized. Intertrust holds hundreds of patents that are key to Internet security, trust, and privacy management components of operating systems, trusted mobile code and networked operating environments, web services, and cloud computing. Additional information is available at intertrust.com, or follow us on Twitter or LinkedIn.

Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding the expected integration of CryptoFirewall™ advanced hardware security cores with ExpressPlay™ cloud service. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change. Actual results may differ materially from the forward-looking statements due to a variety of factors including, but not limited to, risks and uncertainties described from time to time in Rambus’s annual report on Form 10-K, quarterly reports on Forms 10-Q and other periodic filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this press release and Rambus does not undertake to update any forward-looking statements based on new developments or changes in expectations.

Barco Silex Partners with Rambus to Combat Security Threats in Point-of-Sale Market

Enables expansion of DPA Countermeasure solutions beyond traditional smartcard market

SAN FRANCISCO, Calif. – April 6, 2015 – Rambus Inc. (NASDAQ:RMBS) today announced that its Cryptography Research Division has entered into a partnership agreement with Barco Silex. Through this agreement, Barco Silex can develop DPA-resistant solutions that help accelerate time-to-market of security-based products. Barco Silex will utilize Cryptography Research differential power analysis, or DPA, countermeasure technology to help protect against security risks in a variety of point-of-sale applications, including banking, retailing, mass transit, and wireless telecommunications.

“Side-channel attacks are becoming more prevalent, and we need a sound solution to combat this growing risk to ensure customer confidence and protect high value assets,” said Sébastien Rabou, Product Manager at Barco Silex. “The partnership with Rambus allows us to have access to the world-class cryptography engineers while developing solutions to benefit the point-of-sale market.”

“The risk of security breaches continues to explode and customers need to quickly get secure solutions into the market,” said Dr. Simon Blake-Wilson, vice president of Products and Marketing of the Rambus Cryptography Research division. “By partnering with Barco Silex, we have created another channel that will accelerate time-to-market with advanced security technology.”

Concerns about DPA security attacks originated in the smartcard market; however, the potential for these attacks is spreading into many other markets. For this reason, there is a need for DPA countermeasures to be adopted across all markets where valuable financial and personal data is being handled. Today, products commonly at risk include point-of-sale devices, mobile phones, secure USB flash drives, pay television set-top boxes, and optical disc players among others.

DPA is a type of side-channel attack that involves monitoring variations in the electrical power consumption or EM emissions from a target device. These measurements can then be used to derive cryptographic keys and other sensitive information from chips. Rambus Cryptography Research DPA countermeasure technologies are a proven solution for protecting devices against the extraction of cryptographic keys and private data through side-channel attacks. Highly flexible, these solutions can be optimized for performance, size and security level, allowing customers to help fend off unauthorized access to critical information. Having discovered side-channel attacks, Cryptography Research scientists have developed a comprehensive portfolio of application-specific hardware core and software library solutions that chipmakers can use to build DPA resistant products. These DPA resistant solutions can be integrated into a wide range of SoCs, including power-sensitive mobile applications, highly secure anti-tampering and performance-driven multi-core processors.

Barco Silex has joined the Rambus Partner Program, which will enable further collaboration on other combined IP blocks offerings between the two companies. For additional information on the Rambus Partner Program, visit www.rambus.com/partners.

Follow Rambus
Company website: rambus.com
Rambus blog: rambusblog.com
Twitter: @rambusinc
LinkedIn: www.linkedin.com/company/rambus
Facebook: www.facebook.com/RambusInc

About Cryptography Research
The Rambus Cryptography Research division specializes in embedded security solutions to combat the worldwide threat to data integrity, our innovative technologies span areas including tamper resistance, content protection, network security, media and payment and transaction services. Eight billion security products are made annually with our security technology, and systems designed by our scientists and engineers protect hundreds of billions of dollars in revenues every year. Additional information is available at cryptography.com.

About Barco Silex
Barco Silex is leader in video processing, encryption and security IP cores and platforms as well as electronic design services (ASIC, FPGA, DSP, Board). Thanks to its continued stream of innovations, Barco Silex provides state-of-the-art solutions in video, encryption and security. Barco Silex security platforms and encryption cores deliver unrivaled speed performance and compact footprint. For more information about Barco Silex: www.barco-silex.com.

MStar to Use Cryptography Research DPA Countermeasures to Ward Off Attacks in Set-Top Box Solutions

Added security technologies protect tamper-resistant chips in digital home market

SUNNYVALE, Calif., and TAIPEI, Taiwan — February 4, 2015 — Rambus Inc. (NASDAQ:RMBS) today announced that its Cryptography Research Division and MStar, a leading global semiconductor company for display and digital home solutions, have signed a license agreement for the inclusion of advanced DPA countermeasure technologies developed by Cryptography Research in MStar products. By incorporating these patented technologies, MStar’s tamper-resistant products, including set-top box chipsets, can be protected against differential power analysis (DPA) and related attacks.

“With growing threats impacting the content distribution market, we are committed to providing the highest level of security for our customers,” said Jeff Wu, Associate VP at MStar. “DPA countermeasures are integral to providing the highest level of security and now our solutions incorporate comprehensive security ingredients to protect against side-channel and other non-invasive attacks.”

DPA is a form of side-channel attack that involves monitoring the fluctuating electrical power consumption or EM emissions from a target device and then using advanced statistical methods to derive cryptographic keys and other secrets from chips. Since these types of attacks can affect set-top boxes and other consumer electronic devices, there is a growing need in the entertainment industry for advanced side-channel attack solutions to provide secure delivery of high quality content to homes.

“As it becomes easier to mount attacks using DPA, content distributors need protection against side-channel attacks to satisfy requirements in order to provide secure access to high value content,” said Paul Kocher, president and chief scientist of the Rambus Cryptography Research division. “By incorporating DPA countermeasures into their set-top box chipsets, MStar is demonstrating their commitment to deploying comprehensive security measures in the pay TV space.”

Cryptography Research DPA countermeasure technologies are designed to protect devices against certain types of attacks that can extract cryptographic keys and other sensitive data from chips in set-top boxes and other home networking products. By integrating more comprehensive security solutions into set-top boxes, unauthorized access of premium content can be prevented.

About Cryptography Research

The Rambus Cryptography Research division specializes in embedded security solutions to combat the worldwide threat to data integrity, our innovative technologies span areas including tamper resistance, content protection, network security, media and payment and transaction services. Eight billion security products are made annually with our security technology, and systems designed by our scientists and engineers protect hundreds of billions of dollars in revenues every year. Additional information is available at cryptography.com.

About MStar Semiconductor, Inc.

MStar Semiconductor, Inc. is a world-class leader in Application Specific ICs with a focus on consumer electronic products and communication applications. Since the inception in 2002, MStar has established a strong brand and leadership position in LCD controller, analog and digital TV, and set-top box by fully leveraging its core expertise of cutting-edge design capabilities, continuous innovation and premier customer-focused services. Headquartered in Taiwan, MStar has a comprehensive global footprint of international R&D and customer support centers to provide a full range of total solutions for various consumer electronic applications. For more information, please visit www.mstarsemi.com.