Financial

Rambus Reports Second Quarter 2022 Financial Results

Delivered Q2 revenue and earnings at the high end of guidance
Achieved record quarterly product revenue driven by memory interface chips
Expanded DDR5 portfolio with introduction of companion chips for server and client memory modules
Generated $56.5 million in cash from operations

SAN JOSE, Calif. – August 1, 2022– Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the second quarter ended June 30, 2022. GAAP revenue for the second quarter was $121.1 million, licensing billings were $66.1 million, product revenue was $53.3 million, and contract and other revenue was $19.8 million. The Company also generated $56.5 million in cash provided by operating activities in the second quarter.

“Rambus delivered a strong performance with another quarter of record product revenue from memory interface chips and sustained silicon IP momentum driving our results,” said Luc Seraphin, chief executive officer of Rambus. “We continue to address the growing needs of the data center with our diverse and expanding portfolio of offerings to fuel the company’s long-term profitable growth.”

Quarterly Financial Review – GAAP	Three Months Ended June 30,
(In millions, except for percentages and per share amounts)	2022	2021
Revenue
Product revenue	$53.3	$31.2
Royalties	48.0	41.9
Contract and other revenue	19.8	11.8
Total revenue	121.1	84.9
Cost of product revenue	20.4	11.4
Cost of contract and other revenue	1.0	1.0
Amortization of acquired intangible assets (included in total cost of revenue)	3.4	4.5
Total operating expenses ⁽¹⁾	60.8	53.9
Operating income	$35.5	$14.1
Operating margin	29 %	17 %
Net income	$35.0	$11.2
Diluted net income per share	$0.31	$0.10
Net cash provided by operating activities	$56.5	$51.6

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.4 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended June 30,
(In millions)	2022	2021
Licensing billings (operational metric) ⁽²⁾	$66.1	$65.2
Product revenue (GAAP)	$53.3	$31.2
Contract and other revenue (GAAP)	$19.8	$11.8
Non-GAAP cost of product revenue	$20.3	$11.4
Cost of contract and other revenue (GAAP)	$1.0	$1.0
Non-GAAP total operating expenses	$54.9	$43.7
Non-GAAP interest and other income (expense), net	$1.0	$(0.8)
Diluted share count (GAAP)	113	115

_________________________________________

⁽¹⁾ See “Supplemental Reconciliation of GAAP to Non-GAAP Results” table included below.

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

GAAP revenue for the quarter was $121.1 million, at the high end of the Company’s guidance. The Company also had licensing billings of $66.1 million, product revenue of $53.3 million, and contract and other revenue of $19.8 million. The Company had GAAP cost of revenue of $24.8 million and operating expenses of $60.8 million. The Company also had total non-GAAP operating expenses of $76.1 million (including non-GAAP cost of revenue). The Company had GAAP diluted net income per share of $0.31. The Company’s basic share count was 110 million shares and its diluted share count was 113 million shares.

Cash, cash equivalents, and marketable securities as of June 30, 2022 were $351.6 million, an increase of $7.9 million from March 31, 2022, mainly due to $56.5 million in cash generated by operating activities, partially offset by $24.7 million paid in connection with the repayment of 2023 senior notes and $16.1 million paid in connection with the acquisition of Hardent, Inc.

2022 Third Quarter Outlook

The Company will discuss its full revenue guidance for the third quarter of 2022 during its upcoming conference call. The following table sets forth third quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$63 – $69	$63 – $69
Product revenue (GAAP)	$51 – $57	$51 – $57
Contract and other revenue (GAAP)	$18 – $24	$18 – $24
Total operating costs and expenses	$94 – $90	$81 – $77
Interest and other income (expense), net	$0	($1)
Diluted share count	113	113

_________________________________________

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

For the third quarter of 2022, the Company expects licensing billings to be between $63 million and $69 million. The Company also expects royalty revenue to be between $29 million and $35 million, product revenue to be between $51 million and $57 million and contract and other revenue to be between $18 million and $24 million. Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for various product sales and solutions licensing, among other matters.

The Company also expects operating costs and expenses to be between $94 million and $90 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $81 million and $77 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 113 million, and exclude stock-based compensation expense ($9 million), amortization expense ($4 million), non-cash interest expense on convertible notes ($0.1 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($1 million).

Conference Call

The Company’s management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. 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: (866) 813-9403 (domestic) or (+44) 204-525-0658 (international) with ID# 092440.

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: cost of product revenue, 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, amortization of acquired intangible assets, expense on abandoned operating leases, change in fair value of earn-out liability, 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. A 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 current period’s 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.

Amortization of acquired intangible assets. 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.

Expense on abandoned operating leases. Reflects the expense on building leases that were abandoned. The Company excludes these charges because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

Change in fair value of earn-out liability. This change is due to adjustments to acquisition purchase consideration. The Company excludes these adjustments because such adjustments are not directly related to ongoing business results and do not reflect expected future operating expenses.

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 2022 and 2021, 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 business opportunities, the Company’s ability to deliver long-term, profitable growth, product and investment strategies, and the Company’s outlook and financial guidance for the third quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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 COVID-19 and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Nicole Noutsios
Rambus Investor Relations
(510) 315-1003
rambus@nmnadvisors.com

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	June 30, 2022	December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$171,460	$107,891
Marketable securities	180,175	377,718
Accounts receivable	63,602	44,065
Unbilled receivables	146,692	135,608
Inventories	9,238	8,482
Prepaids and other current assets	9,979	10,600
Total current assets	581,146	684,364
Intangible assets, net	58,866	58,420
Goodwill	291,995	278,810
Property, plant and equipment, net	81,735	56,035
Operating lease right-of-use assets	26,343	23,712
Deferred tax assets	2,686	4,047
Unbilled receivables	65,211	123,018
Other assets	2,931	4,240
Total assets	$1,110,913	$1,232,646

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$20,183	$11,279
Accrued salaries and benefits	20,689	20,945
Convertible notes	49,248	163,687
Deferred revenue	22,165	24,755
Income taxes payable	20,846	20,607
Operating lease liabilities	5,873	5,992
Other current liabilities	22,440	20,002
Total current liabilities	161,444	267,267
Long-term liabilities:
Long-term operating lease liabilities	31,219	29,099
Long-term income taxes payable	12,220	21,424
Deferred tax liabilities	25,159	23,985
Other long-term liabilities	42,713	28,475
Total long-term liabilities	111,311	102,983
Total stockholders’ equity	838,158	862,396
Total liabilities and stockholders’ equity	$1,110,913	$1,232,646

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands, except per share amounts)	2022	2021	2022	2021
Revenue:
Product revenue	$53,302	$31,170	$101,271	$61,951
Royalties	48,038	41,910	78,502	70,769
Contract and other revenue	19,792	11,779	40,409	22,521
Total revenue	121,132	84,859	220,182	155,241
Cost of revenue:
Cost of product revenue	20,417	11,422	38,814	22,832
Cost of contract and other revenue	974	1,017	1,598	2,573
Amortization of acquired intangible assets	3,421	4,439	6,799	8,825
Total cost of revenue	24,812	16,878	47,211	34,230
Gross profit	96,320	67,981	172,971	121,011
Operating expenses:
Research and development	39,538	31,469	79,353	63,823
Sales, general and administrative	26,305	22,184	53,211	45,746
Amortization of acquired intangible assets	417	229	826	458
Restructuring charges	—	—	—	368
Change in fair value of earn-out liability	(5,500)	—	(4,300)	—
Total operating expenses	60,760	53,882	129,090	110,395
Operating income	35,560	14,099	43,881	10,616
Interest income and other income (expense), net	2,738	2,381	4,098	5,362
Loss on extinguishment of debt	—	—	(66,497)	—
Loss on fair value adjustment of derivatives, net	—	—	(8,283)	—
Interest expense	(348)	(2,683)	(953)	(5,297)
Interest and other income (expense), net	2,390	(302)	(71,635)	65
Income (loss) before income taxes	37,950	13,797	(27,754)	10,681
Provision for income taxes	2,930	2,631	3,444	2,128
Net income (loss)	$35,020	$11,166	$(31,198)	$8,553
Net income (loss) per share:
Basic	$0.32	$0.10	$(0.28)	$0.08
Diluted	$0.31	$0.10	$(0.28)	$0.07
Weighted average shares used in per share calculation
Basic	110,447	112,144	110,170	112,177
Diluted	112,715	114,931	110,170	115,358

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

	Three Months Ended June 30,
(In thousands)	2022	2021
Cost of product revenue	$20,417	$11,422
Adjustment:
Stock-based compensation expense	(132)	(70)
Non-GAAP cost of product revenue	$20,285	$11,352

Total operating expenses	$60,760	$53,882
Adjustments:
Stock-based compensation expense	(8,504)	(7,228)
Acquisition-related costs and retention bonus expense	(1,949)	(2,200)
Amortization of acquired intangible assets	(417)	(229)
Expense on abandoned operating leases	(531)	(521)
Change in fair value of earn-out liability	5,500	—
Non-GAAP total operating expenses	$54,859	$43,704

Interest and other income (expense), net	$2,390	$ (302)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1,455)	(2,382)
Non-cash interest expense on convertible notes	45	1,901
Non-GAAP interest and other income (expense), net	$980	$(783)

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

2022 Third Quarter Outlook	Three Months Ended September 30, 2022
(In millions)	Low	High
Forward-looking operating costs and expenses	$94.0	$90.0
Adjustments:
Stock-based compensation expense	(9.0)	(9.0)
Amortization of acquired intangible assets	(4.0)	(4.0)
Forward-looking Non-GAAP operating costs and expenses	$ 81.0	$ 77.0

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	(1.2)	(1.2)
Non-cash interest expense on convertible notes	0.1	0.1
Forward-looking Non-GAAP interest and other income (expense), net	$(1.0)	$(1.0)

Rambus Reports First Quarter 2022 Financial Results

Exceeded Q1 guidance for revenue
Delivered record quarterly product revenue of $48.0 million driven by memory interface chips
Strengthened balance sheet by retiring debt and generating $42.6 million in cash from operations

SAN JOSE, Calif. – May 2, 2022– Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the first quarter ended March 31, 2022. GAAP revenue for the first quarter was $99.0 million, licensing billings were $64.1 million, product revenue was $48.0 million, and contract and other revenue was $20.6 million. The Company also generated $42.6 million in cash provided by operating activities in the first quarter.

“Rambus delivered a strong first quarter with record product revenue propelled by robust demand in the data center,” said Luc Seraphin, chief executive officer of Rambus. “With our balanced and diverse portfolio of offerings contributing at scale, we continue to generate cash, execute on our strategy and invest in exciting programs to accelerate the company’s profitable growth.”

Quarterly Financial Review – GAAP	Three Months Ended March 31,
(In millions, except for percentages and per share amounts)	2022	2021
Revenue
Product revenue	$48.0	$30.8
Royalties	30.4	28.9
Contract and other revenue	20.6	10.7
Total revenue	99.0	70.4
Cost of product revenue	18.4	11.4
Cost of contract and other revenue	0.6	1.6
Amortization of acquired intangible assets (included in total cost of revenue)	3.4	4.4
Total operating expenses ⁽¹⁾	68.3	56.5
Operating income (loss)	$8.3	$(3.5)
Operating margin	8%	(5)%
Net loss	$(66.2)	$(2.6)
Diluted net loss per share	$(0.60)	$(0.02)
Net cash provided by operating activities	$42.6	$39.5

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.4 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended March 31,
(In millions)	2022	2021
Licensing billings (operational metric) ⁽²⁾	$64.1	$63.5
Product revenue (GAAP)	$48.0	$30.8
Contract and other revenue (GAAP)	$20.6	$10.7
Non-GAAP cost of product revenue	$18.3	$11.3
Cost of contract and other revenue (GAAP)	$0.6	$1.6
Non-GAAP total operating expenses	$56.0	$45.3
Non-GAAP interest and other income (expense), net	$(0.3)	$(0.6)
Diluted share count (GAAP)	113	116

_________________________________________

⁽¹⁾ See “Supplemental Reconciliation of GAAP to Non-GAAP Results” table included below.
⁽²⁾ Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences relating to advanced payments for variable licensing agreements.

GAAP revenue for the quarter was $99.0 million, exceeding the Company’s guidance. The Company also had licensing billings of $64.1 million, product revenue of $48.0 million, and contract and other revenue of $20.6 million. The Company had GAAP cost of revenue of $22.4 million and operating expenses of $68.3 million. The Company also had total non-GAAP operating expenses of $74.9 million (which includes non-GAAP cost of revenue). The Company had GAAP diluted net loss per share of $0.60. The Company’s basic share count was 110 million shares and its diluted share count would have been 113 million shares.

Cash, cash equivalents, and marketable securities as of March 31, 2022 were $343.7 million, a decrease of $141.9 million from December 31, 2021, mainly due to approximately $174.5 million paid in connection with the repayment of 2023 senior notes, $55.1 million paid in connection with the settlement of warrants, partially offset by proceeds of $72.4 million from the settlement of senior convertible note hedges and $42.6 million cash generated by operating activities.

2022 Second Quarter Outlook

The Company will discuss its full revenue guidance for the second quarter of 2022 during its upcoming conference call. The following table sets forth second quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$61 – $67	$61 – $67
Product revenue (GAAP)	$49 – $55	$49 – $55
Contract and other revenue (GAAP)	$18 – $24	$18 – $24
Total operating costs and expenses	$92 – $88	$79 – $75
Interest and other income (expense), net	($1)	($1)
Diluted share count	114	114

_________________________________________

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

For the second quarter of 2022, the Company expects licensing billings to be between $61 million and $67 million. The Company also expects royalty revenue to be between $42 million and $48 million, product revenue to be between $49 million and $55 million and contract and other revenue to be between $18 million and $24 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 $92 million and $88 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $79 million and $75 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 114 million, and exclude stock-based compensation expense ($9 million), amortization expense ($4 million), non-cash interest expense on convertible notes ($0.1 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($2 million).

Conference Call

The Company’s management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. 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# 6285426.

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: cost of product revenue, 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, amortization of acquired intangible assets, expense on abandoned operating leases, change in fair value of earn-out liability, loss on extinguishment of debt, loss on fair value adjustment of derivatives, net, 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:

Acquisition-related 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 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.

Restatement and shareholder activist costs. These charges consist of costs associated with our restatement of our financial statements and certain shareholder activist costs and are excluded because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

Change in fair value of earn-out liability. This change is due to adjustments of acquisition purchase consideration. The Company excludes these adjustments because such adjustments are not directly related to ongoing business results and do not reflect expected future operating expenses.

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

Loss on fair value adjustment of derivatives, net. The Company has excluded its loss on fair value adjustment of derivatives, net, as this represents cost and benefits of repurchasing its convertible notes and is not a reflection of the Company’s ongoing operations.

Realized loss on sale of marketable securities sold for the purpose of notes repurchase. The Company has excluded its realized loss on sale of marketable securities sold for the purpose of notes repurchase as this is not a reflection of the Company’s ongoing operations.

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 business opportunities, the Company’s ability to deliver long-term, profitable growth, product and investment strategies, and the Company’s outlook and financial guidance for the second quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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) and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact

Keith Jones
Vice President, Finance and Interim Chief Financial Officer
Rambus Inc.
(408) 462-8000
kjones@rambus.com

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	March 31, 2022	December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$179,129	$107,891
Marketable securities	164,562	377,718
Accounts receivable	51,232	44,065
Unbilled receivables	131,748	135,608
Inventories	6,164	8,482
Prepaids and other current assets	12,277	10,600
Total current assets	545,112	684,364
Intangible assets, net	57,634	58,420
Goodwill	279,793	278,810
Property, plant and equipment, net	54,965	56,035
Operating lease right-of-use assets	22,714	23,712
Deferred tax assets	3,986	4,047
Unbilled receivables	93,367	123,018
Other assets	3,304	4,240
Total assets	$1,060,875	$1,232,646

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$15,540	$11,279
Accrued salaries and benefits	17,402	20,945
Convertible notes	73,860	163,687
Deferred revenue	20,624	24,755
Income taxes payable	21,015	20,607
Operating lease liabilities	5,854	5,992
Other current liabilities	14,107	20,002
Total current liabilities	168,402	267,267
Long-term liabilities:
Long-term operating lease liabilities	27,939	29,099
Long-term income taxes payable	16,681	21,424
Deferred tax liabilities	24,572	23,985
Other long-term liabilities	30,155	28,475
Total long-term liabilities	99,347	102,983
Total stockholders’ equity	793,126	862,396
Total liabilities and stockholders’ equity	$1,060,875	$1,232,646

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2022	2021
Revenue:
Product revenue	$47,969	$30,781
Royalties	30,464	28,859
Contract and other revenue	20,617	10,742
Total revenue	99,050	70,382
Cost of revenue:
Cost of product revenue	18,397	11,410
Cost of contract and other revenue	624	1,556
Amortization of acquired intangible assets	3,378	4,386
Total cost of revenue	22,399	17,352
Gross profit	76,651	53,030
Operating expenses:
Research and development	39,815	32,354
Sales, general and administrative	26,906	23,562
Amortization of acquired intangible assets	409	229
Restructuring charges	—	368
Change in fair value of earn-out liability	1,200	—
Total operating expenses	68,330	56,513
Operating income (loss)	8,321	(3,483)
Interest income and other income (expense), net	1,360	2,981
Loss on extinguishment of debt	(66,497)	—
Loss on fair value adjustment of derivatives, net	(8,283)	—
Interest expense	(605)	(2,614)
Interest and other income (expense), net	(74,025)	367
Loss before income taxes	(65,704)	(3,116)
Provision for (benefit from) income taxes	514	(503)
Net loss	$(66,218)	$(2,613)
Net loss per share:
Basic	$(0.60)	$(0.02)
Diluted	$(0.60)	$(0.02)
Weighted average shares used in per share calculation
Basic	109,889	112,211
Diluted	109,889	112,211

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

	Three Months Ended March 31,
(In thousands)	2022	2021
Cost of product revenue	$ 18,397	$11,410
Adjustment:
Stock-based compensation expense	(125)	(89)
Non-GAAP cost of product revenue	$18,272	$11,321

Total operating expenses	$68,330	$56,513
Adjustments:
Stock-based compensation expense	(7,653)	(6,412)
Acquisition-related costs and retention bonus expense	(2,575)	(655)
Amortization of acquired intangible assets	(409)	(229)
Restructuring charges	—	(368)
Expense on abandoned operating leases	(539)	(521)
Restatement and shareholder activist costs	—	(2,956)
Change in fair value of earn-out liability	(1,200)	—
Non-GAAP total operating expenses	$55,954	$45,372

Interest and other income (expense), net	$(74,025)	$367
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1,827)	(2,842)
Non-cash interest expense on convertible notes	105	1,874
Loss on extinguishment of debt	66,497	—
Loss on fair value adjustment of derivatives, net	8,283	—
Realized loss on sale of marketable securities sold for the purpose of notes repurchase	688	—
Non-GAAP interest and other income (expense), net	$(279)	$(601)

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

2022 Second Quarter Outlook	Three Months Ended June 30, 2022
(In millions)	Low	High
Forward-looking operating costs and expenses	$91.7	$87.7
Adjustments:
Stock-based compensation expense	(9.0)	(9.0)
Amortization of acquired intangible assets	(3.7)	(3.7)
Forward-looking Non-GAAP operating costs and expenses	$79.0	$75.0

Forward-looking interest and other income (expense), net	$0.9	$0.9
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1.5)	(1.5)
Non-cash interest expense on convertible notes	0.1	0.1
Forward-looking Non-GAAP interest and other income (expense), net	$(0.5)	$(0.5)

Rambus Reports Fourth Quarter and Fiscal Year 2021 Financial Results

Achieved excellent Q4 results, exceeding guidance for revenue and profitability
Produced record annual product revenue of $143.9 million driven by memory interface chips, up 26% year over year
Generated record cash from operations of $209.2 million for full year 2021, with $72.2 million generated in Q4

SAN JOSE, Calif. – February 7, 2022 – Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the fourth quarter ended December 31, 2021. GAAP revenue for the fourth quarter was $91.8 million; licensing billings were $66.6 million, product revenue was $45.3 million, and contract and other revenue was $13.6 million. The Company also generated $72.2 million in cash provided by operating activities in the fourth quarter, setting an annual record of $209.2 million for the full year 2021.

“Rambus delivered an outstanding fourth quarter contributing to an exceptionally good year, driven by excellent execution and record product revenue,” said Luc Seraphin, chief executive officer of Rambus. “The record cash generation fuels our ongoing strategic investment in scaling the business, returning value to stockholders, and extending our product roadmap to enable continued profitable growth.”

Quarterly Financial Review – GAAP	Three Months Ended December 31,
(In millions, except for percentages and per share amounts)	2021	2020
Revenue
Product revenue	$45.3	$21.8
Royalties	32.9	27.7
Contract and other revenue	13.6	12.4
Total revenue	$91.8	$61.9
Cost of product revenue	$13.4	$7.5
Cost of contract and other revenue	$0.7	$1.6
Amortization of acquired intangible assets (included in total cost of revenue)	$3.6	$4.3
Total operating expenses ⁽¹⁾	$65.1	$59.5
Operating income (loss)	$9.0	$(11.0)
Operating margin	10%	(18) %
Net income (loss)	$6.1	$(12.1)
Diluted net income (loss) per share	$0.05	$(0.11)

Net cash provided by operating activities	$72.2	$42.1

____________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.4 million and $0.2 million for the three months ended December 31, 2021 and 2020, respectively.

Quarterly Financial Review – Non-GAAP (including operational metric) ⁽¹⁾	Three Months Ended December 31,
(In millions)	2021	2020
Licensing billings ⁽²⁾	$66.6	$64.2
Product revenue	$45.3	$21.8
Contract and other revenue	$13.6	$12.4
Cost of product revenue	$13.3	$7.5
Cost of contract and other revenue	$0.7	$1.6
Total operating expenses	$51.4	$46.7
Interest and other income (expense), net	$(1.1)	$(0.6)
Diluted share count	115	115

____________________________

⁽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 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 $91.8 million, exceeding the Company’s guidance. The Company also had licensing billings of $66.6 million, product revenue of $45.3 million, and contract and other revenue of $13.6 million. The Company had total GAAP cost of revenue of $17.7 million and operating expenses of $65.1 million. The Company also had total non-GAAP operating expenses of $65.4 million (which includes non-GAAP cost of revenue), at the low end of its expectations through its operational efficiency. The Company’s annual product revenue increased 26% year over year as the Company continues to gain market share. Due to the Company’s strong performance and operational efficiency, the Company delivered a strong fourth quarter, exceeding guidance for revenue and profitability. The Company had GAAP diluted net income per share of $0.05. The Company’s basic share count was 109 million shares and its diluted share count was 115 million shares.

Cash, cash equivalents, and marketable securities as of December 31, 2021 were $485.6 million, an increase of $65.9 million as compared to September 30, 2021, mainly due to cash provided by operating activities of approximately $72.2 million. Cash provided by operating activities for the year ended December 31, 2021 was $209.2 million, an increase of $23.7 million or 13%, from the same period in the prior year.

2022 First Quarter Outlook

The Company will discuss its full revenue guidance for the first quarter of 2022 during its upcoming conference call. The following table sets forth first quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings ⁽²⁾	$64 – $70	$64 – $70
Product revenue	$43 – $49	$43 – $49
Contract and other revenue	$12 – $18	$12 – $18
Total operating costs and expenses	$84 – $80	$73 – $69
Interest and other income (expense), net	($1)	($1)
Diluted share count	115	115

____________________________

⁽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⁾ 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 first quarter of 2022, the Company expects licensing billings to be between $64 million and $70 million. The Company also expects royalty revenue to be between $30 million and $36 million, product revenue to be between $43 million and $49 million and contract and other revenue to be between $12 million and $18 million. Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for various product sales and solutions licensing, among other matters.

The Company also expects operating costs and expenses to be between $84 million and $80 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $73 million and $69 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 115 million, and exclude stock-based compensation expense ($7 million), amortization expense ($4 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 ($2 million).

Conference Call

Rambus management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. 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# 5264419.

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 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 expenses, acquisition-related costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges, depreciation expense on unused Electronic Design Automation (“EDA”) software licenses, expense on abandoned operating leases, change in fair value of earn-out liability, 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:

Amortization of acquired intangible assets. 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.

Restructuring and other 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.

Depreciation expense on unused EDA software licenses. Reflects the accelerated depreciation expense on EDA software licenses that were abandoned. The Company excludes these charges because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

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% for both 2021 and 2020, 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.

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 business opportunities, the Company’s ability to deliver long-term, profitable growth, industry growth rates, the successful integrations of AnalogX and PLDA, product and investment strategies, the long-term sustainability of the Company’s increased product revenue and cash generated from operating activities, the Company’s outlook and financial guidance for the first quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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) and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact

Keith Jones
Vice President, Finance and Interim Chief Financial Officer
Rambus Inc.
(408) 462-8000
kjones@rambus.com

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	December 31, 2021	December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$107,891	$128,967
Marketable securities	377,718	373,682
Accounts receivable	44,065	27,903
Unbilled receivables	135,608	138,813
Inventories	8,482	14,466
Prepaids and other current assets	10,600	15,881
Total current assets	684,364	699,712
Intangible assets, net	58,420	36,487
Goodwill	278,810	183,222
Property, plant and equipment, net	56,035	57,693
Operating lease right-of-use assets	23,712	28,708
Deferred tax assets	4,047	4,353
Unbilled receivables, long-term	123,018	236,699
Other assets	4,240	4,535
Total assets	$1,232,646	$1,251,409

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$11,279	$8,993
Accrued salaries and benefits	20,945	23,326
Deferred revenue	24,755	10,198
Income taxes payable, short-term	20,607	20,064
Convertible notes, short-term	163,687	—
Operating lease liabilities	5,992	4,724
Other current liabilities	20,002	18,559
Total current liabilities	267,267	85,864
Long-term liabilities:
Convertible notes, long-term	—	156,031
Long-term operating lease liabilities	29,099	34,305
Long-term income taxes payable	21,424	41,333
Deferred tax liabilities	23,985	14,276
Other long-term liabilities	28,475	6,894
Total long-term liabilities	102,983	252,839
Total stockholders’ equity	862,396	912,706
Total liabilities and stockholders’ equity	$1,232,646	$1,251,409

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended December 31,		Years Ended December 31,
(In thousands, except per share amounts)	2021	2020	2021	2020
Revenue:
Product revenue	$45,274	$21,774	$143,935	$113,996
Royalties	32,893	27,732	136,706	84,560
Contract and other revenue	13,614	12,407	47,663	47,766
Total revenue	91,781	61,913	328,304	246,322
Cost of revenue:
Cost of product revenue	13,408	7,468	49,397	37,749
Cost of contract and other revenue	727	1,647	4,756	5,647
Amortization of acquired intangible assets	3,603	4,336	16,241	17,352
Total cost of revenue	17,738	13,451	70,394	60,748
Gross profit	74,043	48,462	257,910	185,574
Operating expenses:
Research and development	36,263	34,752	135,678	139,837
Sales, general and administrative	23,101	21,232	91,057	86,441
Amortization of acquired intangible assets	409	229	1,226	1,061
Restructuring and other charges	—	3,253	368	4,089
Change in fair value of earn-out liability	5,300	—	5,300	(1,800)
Total operating expenses	65,073	59,466	233,629	229,628
Operating income (loss)	8,970	(11,004)	24,281	(44,054)
Interest income and other income (expense), net	1,623	3,170	9,711	17,855
Interest expense	(2,737)	(2,619)	(10,706)	(10,340)
Interest and other income (expense), net	(1,114)	551	(995)	7,515
Income (loss) before income taxes	7,856	(10,453)	23,286	(36,539)
Provision for income taxes	1,751	1,602	4,952	3,932
Net income (loss)	$6,105	$(12,055)	$18,334	$(40,471)
Net income (loss) per share:
Basic	$0.06	$(0.11)	$0.17	$(0.36)
Diluted	$0.05	$(0.11)	$0.16	$(0.36)
Weighted average shares used in per share calculation:
Basic	109,161	112,706	110,538	113,254
Diluted	114,534	112,706	114,865	113,254

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

	Three Months Ended
	December 31,
(In thousands)	2021	2020
Cost of product revenue	$13,408	$7,468
Adjustment:
Stock-based compensation expense	(112)	—
Non-GAAP cost of product revenue	$13,296	$7,468

Total operating expenses	$65,073	$59,466
Adjustments:
Stock-based compensation expense	(6,092)	(6,165)
Acquisition-related costs and retention bonus expense	(1,308)	(781)
Amortization of acquired intangible assets	(409)	(229)
Restructuring and other charges	—	(3,253)
Depreciation expense on unused EDA software licenses	—	(2,183)
Expense on abandoned operating leases	(559)	(174)
Change in fair value of earn-out liability	(5,300)	—
Non-GAAP total operating expenses	$51,405	$46,681

Interest and other income (expense), net	$(1,114)	$551
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1,907)	(2,984)
Non-cash interest expense on convertible notes	1,954	1,849
Non-GAAP interest and other income (expense), net	$(1,067)	$(584)

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

2022 First Quarter Outlook	Three Months Ended March 31, 2022
(In millions)	Low	High
Forward-looking operating costs and expenses	$83.8	$79.8
Adjustments:
Stock-based compensation expense	(7.0)	(7.0)
Amortization of acquired intangible assets	(3.8)	(3.8)
Forward-looking Non-GAAP operating costs and expenses	$73.0	$69.0

Forward-looking interest and other income (expense), net	$(0.9)	$(0.9)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1.9)	(1.9)
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 Reports Third Quarter 2021 Financial Results

Delivered Q3 revenue and profitability in line with guidance
Generated $46.0 million in cash provided by operating activities
Delivered record product revenue of $36.7 million, consisting mainly of memory interface chips
Closed the acquisitions of AnalogX and PLDA, bolstering Silicon IP business and CXL Memory Interconnect Initiative

SAN JOSE, Calif. – November 1, 2021 – Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the third quarter ended September 30, 2021. GAAP revenue for the third quarter was $81.3 million; licensing billings were $66.1 million, product revenue was $36.7 million, and contract and other revenue was $11.5 million. The Company also generated $46.0 million in cash provided by operating activities.

“Rambus delivered a strong third quarter, supported by great execution from the team,” said Luc Seraphin, chief executive officer of Rambus. “We are well positioned for continued profitable growth as demonstrated by this quarter’s record product revenue from memory interface chips. Strategically, we continue to scale the business as the integrations of AnalogX and PLDA are well underway with the new teams already contributing new products and design wins.”

Quarterly Financial Review – GAAP	Three Months Ended September 30,
(In millions, except for percentages and per share amounts)	2021	2020
Revenue
Product revenue	$36.7	$29.8
Royalties	33.1	16.6
Contract and other revenue	11.5	10.5
Total revenue	81.3	56.9
Cost of product revenue	13.1	9.7
Cost of contract and other revenue	1.5	1.3
Amortization of acquired intangible assets (included in total cost of revenue)	3.8	4.3
Total operating expenses ⁽¹⁾	58.2	54.1
Operating income (loss)	$4.7	$(12.5)
Operating margin	6%	(22)%
Net income (loss)	$3.7	$(12.7)
Diluted net income (loss) per share	$0.03	$(0.11)
Net cash provided by operating activities	$46.0	$44.1

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.4 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively.

Quarterly Financial Review – Non-GAAP (including operational metric) ⁽¹⁾	Three Months Ended September 30,
(In millions)	2021	2020
Licensing billings ⁽²⁾	$66.1	$63.1
Product revenue	$36.7	$29.8
Contract and other revenue	$11.5	$10.5
Cost of product revenue	$13.1	$9.7
Cost of contract and other revenue	$1.5	$1.3
Total operating expenses	$48.2	$45.8
Interest and other income (expense), net	$(0.2)	$(0.6)
Diluted share count	114	116

_________________________________________

⁽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 $81.3 million, in line with the Company’s expectations. The Company also had licensing billings of $66.1 million, product revenue of $36.7 million, and contract and other revenue of $11.5 million. The Company had GAAP cost of revenue of $18.4 million and operating expenses of $58.2 million. The Company also had total non-GAAP operating expenses of $62.8 million (which includes non-GAAP cost of revenue), in line with the Company’s expectations. The Company had GAAP diluted net income per share of $0.03. The Company’s diluted share count was 114 million shares. Due to the Company’s strong performance and focus on operational efficiency, the Company delivered strong results in the third quarter, with revenue and profitability in line with expectations.

Cash, cash equivalents, and marketable securities as of September 30, 2021 were $419.7 million, a decrease of $57.4 million from June 30, 2021, mainly due to approximately $97.1 million paid in connection with the acquisitions of AnalogX Inc. and PLDA Group, net of cash acquired of approximately $8.6 million, partially offset by cash provided by operating activities of approximately $46.0 million.

2021 Fourth Quarter Outlook

The Company will discuss its full revenue guidance for the fourth quarter of 2021 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⁾	$62 – $68	$62 – $68
Product revenue	$40 – $46	$40 – $46
Contract and other revenue	$12 – $18	$12 – $18
Total operating costs and expenses	$80 – $76	$68 – $64
Interest and other income (expense), net	($1)	($1)
Diluted share count	115	115

_________________________________________

⁽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.

For the fourth quarter of 2021, the Company expects licensing billings to be between $62 million and $68 million. The Company also expects royalty revenue to be between $26 million and $32 million, product revenue to be between $40 million and $46 million and contract and other revenue to be between $12 million and $18 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 $80 million and $76 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $68 million and $64 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 115 million, and exclude stock-based compensation expense ($8 million), amortization expense ($4 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 ($2 million).

Conference Call

The Company’s management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. 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# 9537075.

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, amortization of acquired intangible assets, expense on abandoned operating leases, 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:

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 2021 and 2020, 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.

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 business opportunities, the Company’s ability to deliver long-term, profitable growth, the successful integrations of AnalogX and PLDA, product and investment strategies, and the Company’s outlook and financial guidance for the fourth quarter of 2021 and related drivers. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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). The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact

Rahul Mathur
Senior Vice President, Finance and Chief Financial Officer
Rambus Inc.
(408) 462-8000
rmathur@rambus.com

Source: Rambus Inc.
Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	September 30, 2021	December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$151,871	$128,967
Marketable securities	267,857	373,682
Accounts receivable	46,674	27,903
Unbilled receivables	138,281	138,813
Inventories	8,085	14,466
Prepaids and other current assets	11,991	15,881
Total current assets	624,759	699,712
Intangible assets, net	62,431	36,487
Goodwill	279,091	183,222
Property, plant and equipment, net	51,516	57,693
Operating lease right-of-use assets	25,202	28,708
Deferred tax assets	3,846	4,353
Unbilled receivables	151,462	236,699
Other assets	4,359	4,535
Total assets	$1,202,666	$1,251,409

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$13,281	$8,993
Accrued salaries and benefits	15,331	23,326
Deferred revenue	20,324	10,198
Income taxes payable	20,443	20,064
Operating lease liabilities	6,501	4,724
Other current liabilities	19,295	18,559
Total current liabilities	95,175	85,864
Long-term liabilities:
Convertible notes	161,733	156,031
Long-term operating lease liabilities	30,400	34,305
Long-term income taxes payable	25,797	41,333
Deferred tax liabilities	23,888	14,276
Other long-term liabilities	17,830	6,894
Total long-term liabilities	259,648	252,839
Total stockholders’ equity	847,843	912,706
Total liabilities and stockholders’ equity	$1,202,666	$1,251,409

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
(In thousands, except per share amounts)	2021	2020	2021	2020
Revenue:
Product revenue	$36,710	$29,769	$98,661	$92,222
Royalties	33,044	16,602	103,813	56,828
Contract and other revenue	11,528	10,544	34,049	35,359
Total revenue	81,282	56,915	236,523	184,409
Cost of revenue:
Cost of product revenue	13,157	9,661	35,989	30,281
Cost of contract and other revenue	1,456	1,267	4,029	4,000
Amortization of acquired intangible assets	3,813	4,336	12,638	13,016
Total cost of revenue	18,426	15,264	52,656	47,297
Gross profit	62,856	41,651	183,867	137,112
Operating expenses:
Research and development	35,592	33,733	99,415	105,085
Sales, general and administrative	22,210	20,182	67,956	65,209
Amortization of acquired intangible assets	359	236	817	832
Restructuring charges	—	—	368	836
Change in fair value of earn-out liability	—	—	—	(1,800)
Total operating expenses	58,161	54,151	168,556	170,162
Operating income (loss)	4,695	(12,500)	15,311	(33,050)
Interest income and other income (expense), net	2,726	3,554	8,088	14,685
Interest expense	(2,672)	(2,586)	(7,969)	(7,721)
Interest and other income (expense), net	54	968	119	6,964
Income (loss) before income taxes	4,749	(11,532)	15,430	(26,086)
Provision for income taxes	1,073	1,205	3,201	2,330
Net income (loss)	$3,676	$(12,737)	$12,229	$(28,416)
Net income (loss) per share:
Basic	$0.03	$(0.11)	$0.11	$(0.25)
Diluted	$0.03	$(0.11)	$0.11	$(0.25)
Weighted average shares used in per share calculation
Basic	108,989	113,828	111,103	113,437
Diluted	113,661	113,828	114,954	113,437

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

	Three Months Ended September 30,
(In thousands)	2021	2020
Cost of product revenue	$13,157	$9,661
Adjustment:
Stock-based compensation expense	(101)	—
Non-GAAP cost of product revenue	$13,056	$9,661

Total operating expenses	$58,161	$54,151
Adjustments:
Stock-based compensation expense	(7,381)	(6,834)
Acquisition-related costs and retention bonus expense	(1,658)	(1,327)
Amortization of acquired intangible assets	(359)	(236)
Expense on abandoned operating leases	(521)	—
Non-GAAP total operating expenses	$48,242	$45,754

Interest and other income (expense), net	$54	$968
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(2,163)	(3,379)
Non-cash interest expense on convertible notes	1,927	1,823
Non-GAAP interest and other income (expense), net	$(182)	$(588)

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

2021 Fourth Quarter Outlook	Three Months Ended December 31, 2021
(In millions)	Low	High
Forward-looking operating costs and expenses	$79.9	$75.9
Adjustments:
Stock-based compensation expense	(8.0)	(8.0)
Amortization of acquired intangible assets	(3.9)	(3.9)
Forward-looking Non-GAAP operating costs and expenses	$68.0	$64.0

Forward-looking interest and other income (expense), net	$(1.0)	$(1.0)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(1.9)	(1.9)
Non-cash interest expense on convertible notes	1.9	1.9
Forward-looking Non-GAAP interest and other income (expense), net	$(1.0)	$(1.0)

Rambus Reports Second Quarter 2021 Financial Results

Exceeded Q2 guidance for revenue and profitability
Generated $51.6 million in cash provided by operating activities
Initiated $100 million accelerated share repurchase program
Accelerated data center solution roadmap with CXL Memory Interconnect Initiative
Announced the acquisitions of AnalogX and PLDA

SAN JOSE, Calif. – August 2, 2021 – Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the second quarter ended June 30, 2021. GAAP revenue for the second quarter was $84.9 million; licensing billings were $65.2 million, product revenue was $31.2 million, and contract and other revenue was $11.8 million. The Company also generated $51.6 million in cash provided by operating activities.

“Rambus had an exciting second quarter, making a number of strategic advancements to capture the next wave of semiconductor growth focused on next-generation data center architectures, and exceeding financial guidance for the top and bottom line,” said Luc Seraphin, chief executive officer of Rambus. “Product revenue from memory interface chips remains strong, and we had record revenue from security and digital controller IP. The Company continues to scale, putting us in a great position for long-term profitable growth.”

Quarterly Financial Review – GAAP	Three Months Ended June 30,
(In millions, except for percentages and per share amounts)	2021	2020
Revenue
Product revenue	$31.2	$31.7
Royalties	41.9	18.7
Contract and other revenue	11.8	11.3
Total revenue	84.9	61.7
Cost of product revenue	11.4	10.3
Cost of contract and other revenue	1.0	1.5
Amortization of acquired intangible assets (included in total cost of revenue)	4.5	4.3
Total operating expenses ⁽¹⁾	53.9	56.7
Operating income (loss)	$14.1	$(11.1)
Operating margin	17%	(18)%
Net income (loss)	$11.2	$(9.1)
Diluted net income (loss) per share	$0.10	$(0.08)
Net cash provided by operating activities	$51.6	$62.0

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.2 million for each of the three months ended June 30, 2021 and 2020.

Quarterly Financial Review – Non-GAAP (including operational metric) ⁽¹⁾	Three Months Ended June 30,
(In millions)	2021	2020
Licensing billings ⁽²⁾	$65.2	$60.7
Product revenue	$31.2	$31.7
Contract and other revenue	$11.8	$11.3
Cost of product revenue	$11.4	$10.3
Cost of contract and other revenue	$1.0	$1.5
Total operating expenses	$43.7	$47.7
Interest and other income (expense), net	$(0.8)	$0.1
Diluted share count	115	115

_________________________________________

⁽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 $84.9 million, above the high end of the Company’s expectations. The Company also had licensing billings of $65.2 million, product revenue of $31.2 million, and contract and other revenue of $11.8 million. The Company had total GAAP cost of revenue of $16.9 million and operating expenses of $53.9 million. The Company also had total non-GAAP operating expenses of $56.1 million (which includes non-GAAP cost of revenue), below the low end of its expectations. The Company had GAAP diluted net income per share of $0.10. The Company’s diluted share count was 115 million shares. Due to the Company’s strong performance and focus on operational efficiency, the Company delivered excellent results in the second quarter, exceeding its revenue and profitability guidance.

Cash, cash equivalents, and marketable securities as of June 30, 2021 were $477.1 million, a decrease of $52.0 million from March 31, 2021, mainly due to $100 million paid in connection with an accelerated share repurchase program, partially offset by cash provided by operating activities of approximately $51.6 million.

2021 Third Quarter Outlook

The Company will discuss its full revenue guidance for the third quarter of 2021 during its upcoming conference call. The following table sets forth third quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings ⁽²⁾	$59 – $65	$59 – $65
Product revenue	$34 – $40	$34 – $40
Contract and other revenue	$11 – $17	$11 – $17
Total operating costs and expenses	$76 – $72	$65 – $61
Interest and other income (expense), net	($1)	($1)
Diluted share count	113	113

_________________________________________

For the third quarter of 2021, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $25 million and $31 million, product revenue to be between $34 million and $40 million and contract and other revenue to be between $11 million and $17 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 $76 million and $72 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $65 million and $61 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 113 million, and exclude stock-based compensation expense ($8 million), amortization expense ($3 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 ($2 million).

Conference Call

The Company’s management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. 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# 7478989.

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, amortization of acquired intangible assets, expense on abandoned operating leases, facility restoration costs, 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:

Facility restoration costs. These charges consist of exit costs associated with our leased office space and are excluded because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.

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 2021 and 2020, 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.

About Rambus Inc.

Rambus is a provider of industry-leading chips and silicon IP making data faster and safer. With over 30 years of advanced semiconductor experience, we are a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences. For more information, visit rambus.com.

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 business opportunities, the Company’s ability to deliver long-term, profitable growth, and the Company’s outlook and financial guidance for the third quarter of 2021 and related drivers. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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). The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact

Rahul Mathur
Senior Vice President, Finance and Chief Financial Officer
Rambus Inc.
(408) 462-8000
rmathur@rambus.com

Source: Rambus Inc.

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	June 30, 2021	December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$204,731	$128,967
Marketable securities	272,382	373,682
Accounts receivable	38,730	27,903
Unbilled receivables	144,546	138,813
Inventories	8,052	14,466
Prepaids and other current assets	10,544	15,881
Total current assets	678,985	699,712
Intangible assets, net	27,203	36,487
Goodwill	183,222	183,222
Property, plant and equipment, net	50,058	57,693
Operating lease right-of-use assets	25,801	28,708
Deferred tax assets	3,907	4,353
Unbilled receivables	179,503	236,699
Other assets	4,306	4,535
Total assets	$1,152,985	$1,251,409

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$8,975	$8,993
Accrued salaries and benefits	15,878	23,326
Deferred revenue	12,299	10,198
Income taxes payable	19,754	20,064
Operating lease liabilities	6,722	4,724
Other current liabilities	17,798	18,559
Total current liabilities	81,426	85,864
Long-term liabilities:
Convertible notes	159,806	156,031
Long-term operating lease liabilities	31,104	34,305
Long-term income taxes payable	31,853	41,333
Deferred tax liabilities	15,147	14,276
Other long-term liabilities	3,061	6,894
Total long-term liabilities	240,971	252,839
Total stockholders’ equity	830,588	912,706
Total liabilities and stockholders’ equity	$1,152,985	$1,251,409

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands, except per share amounts)	2021	2020	2021	2020
Revenue:
Product revenue	$31,170	$31,725	$61,951	$62,453
Royalties	41,910	18,744	70,769	40,226
Contract and other revenue	11,779	11,248	22,521	24,815
Total revenue	84,859	61,717	155,241	127,494
Cost of revenue:
Cost of product revenue	11,422	10,277	22,832	20,620
Cost of contract and other revenue	1,017	1,535	2,573	2,733
Amortization of acquired intangible assets	4,439	4,336	8,825	8,680
Total cost of revenue	16,878	16,148	34,230	32,033
Gross profit	67,981	45,569	121,011	95,461
Operating expenses:
Research and development	31,469	34,688	63,823	71,352
Sales, general and administrative	22,184	21,721	45,746	45,027
Amortization of acquired intangible assets	229	248	458	596
Restructuring charges	—	—	368	836
Change in fair value of earn-out liability	—	—	—	(1,800)
Total operating expenses	53,882	56,657	110,395	116,011
Operating income (loss)	14,099	(11,088)	10,616	(20,550)
Interest income and other income (expense), net	2,381	4,688	5,362	11,131
Interest expense	(2,683)	(2,580)	(5,297)	(5,135)
Interest and other income (expense), net	(302)	2,108	65	5,996
Income (loss) before income taxes	13,797	(8,980)	10,681	(14,554)
Provision for income taxes	2,631	160	2,128	1,125
Net income (loss)	$11,166	$(9,140)	$8,553	$(15,679)
Net income (loss) per share:
Basic	$0.10	$(0.08)	$0.08	$(0.14)
Diluted	$0.10	$(0.08)	$0.07	$(0.14)
Weighted average shares used in per share calculation
Basic	112,144	113,572	112,177	113,240
Diluted	114,931	113,572	115,358	113,240

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

	Three Months Ended June 30,
(In thousands)	2021	2020
Cost of product revenue	$11,422	$10,277
Adjustment:
Stock-based compensation expense	(70)	—
Non-GAAP cost of product revenue	$11,352	$10,277

Total operating expenses	$53,882	$56,657
Adjustments:
Stock-based compensation expense	(7,228)	(6,707)
Acquisition-related costs and retention bonus expense	(2,200)	(1,577)
Amortization of acquired intangible assets	(229)	(248)
Expense on abandoned operating leases	(521)	—
Facility restoration costs	—	(411)
Non-GAAP total operating expenses	$43,704	$47,714

Interest and other income (expense), net	$(302)	$2,108
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(2,382)	(3,788)
Non-cash interest expense on convertible notes	1,901	1,798
Non-GAAP interest and other income (expense), net	$(783)	$118

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

2021 Third Quarter Outlook	Three Months Ended September 30, 2021
(In millions)	Low	High
Forward-looking operating costs and expenses	$76.2	$72.2
Adjustments:
Stock-based compensation expense	(8.0)	(8.0)
Amortization of acquired intangible assets	(3.2)	(3.2)
Forward-looking Non-GAAP operating costs and expenses	$65.0	$61.0

Forward-looking interest and other income (expense), net	$(0.8)	$(0.8)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(2.1)	(2.1)
Non-cash interest expense on convertible notes	1.9	1.9
Forward-looking Non-GAAP interest and other income (expense), net	$(1.0)	$(1.0)

Rambus Reports First Quarter 2021 Financial Results

Delivered strong Q1 results at high end of revenue and profitability targets
Product revenue of $30.8 million, up 41% quarter over quarter, consisting primarily of memory interface chips
Generated $39.5 million in cash provided by operating activities

SAN JOSE, Calif. – May 3, 2021 – Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the first quarter ended March 31, 2021. GAAP revenue for the first quarter was $70.4 million; licensing billings were $63.5 million, product revenue was $30.8 million, and contract and other revenue was $10.7 million. The Company also generated $39.5 million in cash provided by operating activities.

“Rambus executed well in the first quarter, with revenue and earnings at the high end of expectations, and strong cash generation fueling investment in our product roadmap,” said Luc Seraphin, chief executive officer of Rambus. “Ongoing share gains for memory interface chips and strong demand in Cloud and other target markets are driving topline growth for the company. We are pleased with our customer momentum and are confident in the Company’s ability to deliver ongoing profitable growth.”

Quarterly Financial Review – GAAP	Three Months Ended March 31,
(In millions, except for percentages and per share amounts)	2021	2020
Revenue
Royalties	$28.9	$21.5
Product revenue	30.8	30.7
Contract and other revenue	10.7	13.6
Total revenue	$70.4	$65.8
Cost of product revenue	$11.4	$10.3
Cost of contract and other revenue	$1.6	$1.2
Amortization of acquired intangible assets (included in total cost of revenue)	$4.4	$4.4
Total operating expenses (1)	$56.5	$59.4
Operating loss	$(3.5)	$(9.5)
Operating margin	(5)%	(14)%
Net loss	$(2.6)	$(6.5)
Diluted net loss per share	$(0.02)	$(0.06)
Net cash provided by operating activities	$39.5	$37.3

(1) Includes amortization of acquired intangible assets of approximately $0.2 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Quarterly Financial Review – Non-GAAP (including operational metric) (1)	Three Months Ended March 31,
(In millions)	2021	2020
Licensing billings (2)	$63.5	$67.1
Product revenue	$30.8	$30.7
Contract and other revenue	$10.7	$13.6
Cost of product revenue	$11.3	$10.3
Cost of contract and other revenue	$1.6	$1.2
Total operating expenses	$45.3	$51.9
Interest and other income (expense), net	$(0.6)	$1.2
Diluted share count	116	115

(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 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 $70.4 million, at the high end of the Company’s expectations. The Company also had licensing billings of $63.5 million, product revenue of $30.8 million, and contract and other revenue of $10.7 million. The Company had total GAAP cost of revenue of $17.4 million and operating expenses of $56.5 million. The Company also had total non-GAAP operating expenses of $58.2 million (which includes non-GAAP cost of revenue), lower than the midpoint of its expectations. The Company had GAAP diluted net loss per share of $0.02. The Company’s basic share count was 112 million shares and its diluted share count would have been 116 million shares. Due to the Company’s strong performance and focus on operational efficiency, the Company delivered a strong first quarter, at the high end of its expectations on revenue and profit.

Cash, cash equivalents, and marketable securities as of March 31, 2021 were $529.1 million, an increase of $26.5 million from December 31, 2020, mainly due to $39.5 million in cash provided by operating activities.

2021 Second Quarter Outlook

The Company will discuss its full revenue guidance for the second quarter of 2021 during its upcoming conference call. The following table sets forth second quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP (1)
Licensing billings (2)	$60 – $66	$60 – $66
Product revenue	$30 – $36	$30 – $36
Contract and other revenue	$8 – $14	$8 – $14
Total operating costs and expenses	$74 – $70	$61 – $57
Interest and other income (expense), net	($1)	($1)
Diluted share count	116	116

(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 second quarter of 2021, the Company expects licensing billings to be between $60 million and $66 million. The Company also expects royalty revenue to be between $32 million and $38 million, product revenue to be between $30 million and $36 million and contract and other revenue to be between $8 million and $14 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 $74 million and $70 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $61 million and $57 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 116 million, and exclude stock-based compensation expense ($8 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 ($2 million).

Conference Call

The Company’s 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# 3985069.

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, amortization of acquired intangible assets, restructuring charges, expense on abandoned operating leases, restatement and shareholder activist costs, facility restoration costs, change in fair value of earn-out liability, 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:

Acquisition-related/divestiture costs and retention bonus expense. These expenses include all direct costs of certain acquisitions, divestitures 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 as they are related to acquisitions and divestitures and have no direct correlation to the Company’s operations.

Change in fair value of earn-out liability. This change is due to a reduction of acquisition purchase consideration. This is a non-recurring benefit that has no direct correlation to the operation of the Company’s business.

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 2021 and 2020, 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.

Forward-Looking Statements

This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including those relating to drivers of the Company’s topline growth, the Company’s ability to deliver ongoing profitable growth, and the Company’s outlook for the second quarter of 2021. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s 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). The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Rahul Mathur
Senior Vice President, Finance and Chief Financial Officer
Rambus Inc.
(408) 462-8000
rmathur@rambus.com

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

	March 31, 2021	December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$109,554	$136,146
Marketable securities	419,574	366,503
Accounts receivable	35,937	27,903
Unbilled receivables	137,729	138,813
Inventories	9,926	14,466
Prepaids and other current assets	11,616	15,881
Total current assets	724,336	699,712
Intangible assets, net	31,872	36,487
Goodwill	183,222	183,222
Property, plant and equipment, net	53,687	57,693
Operating lease right-of-use assets	27,214	28,708
Deferred tax assets	4,372	4,353
Unbilled receivables, long-term	207,016	236,699
Other assets	4,061	4,535
Total assets	$1,235,780	$1,251,409

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$7,802	$8,993
Accrued salaries and benefits	14,113	23,326
Deferred revenue	13,534	10,198
Income taxes payable, short-term	20,186	20,064
Operating lease liabilities	7,026	4,724
Other current liabilities	17,741	18,559
Total current liabilities	80,402	85,864
Long-term liabilities:
Convertible notes, long-term	157,905	156,031
Long-term operating lease liabilities	32,535	34,305
Long-term income taxes payable	36,391	41,333
Deferred tax liabilities	14,711	14,276
Other long-term liabilities	4,430	6,894
Total long-term liabilities	245,972	252,839
Total stockholders’ equity	909,406	912,706
Total liabilities and stockholders’ equity	$1,235,780	$1,251,409

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

	Three Months Ended March 31,
	2021	2020
Revenue:
Royalties	$28,859	$21,482
Product revenue	30,781	30,728
Contract and other revenue	10,742	13,567
Total revenue	70,382	65,777
Cost of revenue:
Cost of product revenue	11,410	10,343
Cost of contract and other revenue	1,556	1,198
Amortization of acquired intangible assets	4,386	4,344
Total cost of revenue	17,352	15,885
Gross profit	53,030	49,892
Operating expenses:
Research and development	32,354	36,664
Sales, general and administrative	23,562	23,306
Amortization of acquired intangible assets	229	348
Restructuring charges	368	836
Change in fair value of earn-out liability	—	(1,800)
Total operating expenses	56,513	59,354
Operating loss	(3,483)	(9,462)
Interest income and other income (expense), net	2,981	6,443
Interest expense	(2,614)	(2,555)
Interest and other income (expense), net	367	3,888
Loss before income taxes	(3,116)	(5,574)
Provision for (benefit from) income taxes	(503)	965
Net loss	$(2,613)	$(6,539)
Net loss per share:
Basic	$(0.02)	$(0.06)
Diluted	$(0.02)	$(0.06)
Weighted average shares used in per share calculation
Basic	112,211	112,907
Diluted	112,211	112,907

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

	Three Months Ended March 31,
	2021	2020
Cost of product revenue	$11,410	$10,343
Adjustment:
Stock-based compensation expense	(89)	—
Non-GAAP cost of product revenue	$11,321	$10,343

Total operating expenses	$56,513	$59,354
Adjustments:
Stock-based compensation expense	(6,501)	(6,072)
Acquisition-related costs and retention bonus expense	(655)	(1,577)
Amortization of acquired intangible assets	(229)	(348)
Restructuring charges	(368)	(836)
Expense on abandoned operating leases	(521)	—
Restatement and shareholder activist costs	(2,956)	—
Facility restoration costs	—	(411)
Change in fair value of earn-out liability	—	1,800
Non-GAAP total operating expenses	$45,283	$51,910

Interest and other income (expense), net	$367	$3,888
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(2,842)	(4,437)
Non-cash interest expense on convertible notes	1,874	1,773
Non-GAAP interest and other income (expense), net	$(601)	$1,224

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

2021 Second Quarter Outlook	Three Months Ended June 30, 2021
	Low	High
Forward-looking operating costs and expenses	$73.7	$69.7
Adjustments:
Stock-based compensation expense	(8.0)	(8.0)
Amortization of acquired intangible assets	(4.7)	(4.7)
Forward-looking Non-GAAP operating costs and expenses	$61.0	$57.0

Forward-looking interest and other income (expense), net	$(0.5)	$(0.5)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(2.4)	(2.4)
Non-cash interest expense on convertible notes	1.9	1.9
Forward-looking Non-GAAP interest and other income (expense), net	$(1.0)	$(1.0)

Rambus Reports Second Quarter 2022 Financial Results

Rambus Reports First Quarter 2022 Financial Results

Rambus Reports Fourth Quarter and Fiscal Year 2021 Financial Results

Rambus Reports Third Quarter 2021 Financial Results

Rambus Reports Second Quarter 2021 Financial Results

Rambus Reports First Quarter 2021 Financial Results

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