Financial

Rambus Reports Fourth Quarter And Fiscal Year 2024 Financial Results

Delivered record quarterly product revenue of $73.4 million, up 11% sequentially and 37% year over year
Generated record annual cash from operations of $230.6 million for 2024, up 18% year over year
Extended patent license agreement with Micron through 2029

SAN JOSE, Calif. – February 3, 2025 – 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, 2024. GAAP revenue for the fourth quarter was $161.1 million; licensing billings were $63.6 million, product revenue was $73.4 million, and contract and other revenue was $29.5 million. The Company also generated $59.0 million in cash provided by operating activities in the fourth quarter.

“We finished 2024 strongly with sequential and year-over-year growth, delivering record annual product revenue and cash from operations,” said Luc Seraphin, chief executive officer of Rambus. “We expanded our addressable market with a record number of new product introductions throughout the year and gained share through continued product leadership. As AI continues to accelerate performance demands across the computing landscape, we are well positioned to deliver long-term growth and continued stockholder return.”

Quarterly Financial Review – GAAP	Three Months Ended December 31,
(In millions, except for percentages and per share amounts)	2024	2023
Revenue
Product revenue	$ 73.4	$ 53.7
Royalties	58.2	52.4
Contract and other revenue	29.5	16.1
Total revenue	161.1	122.2
Cost of product revenue	28.5	19.9
Cost of contract and other revenue	0.7	1.1
Amortization of acquired intangible assets (included in total cost of revenue)	2.3	3.1
Total operating expenses ⁽¹⁾	71.7	63.0
Operating income	$ 57.9	$ 35.1
Operating margin	36 %	29 %
Net income	$ 62.2	$ 58.5
Diluted net income per share	$ 0.58	$ 0.53

Net cash provided by operating activities	$ 59.0	$ 54.8

____________________________

⁽¹⁾ Includes amortization of acquired intangibles of approximately $0.2 million for the three months ended December 31, 2023. Amortization of acquired intangibles was immaterial for the three months ended December 31, 2024.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended December 31,
(In millions)	2024	2023
Licensing billings (operational metric)⁽²⁾	$ 63.6	$ 66.2
Product revenue (GAAP)	$ 73.4	$ 53.7
Contract and other revenue (GAAP)	$ 29.5	$ 16.1
Non-GAAP cost of product revenue	$ 28.3	$ 19.8
Cost of contract and other revenue (GAAP)	$ 0.7	$ 1.1
Non-GAAP total operating expenses	$ 60.1	$ 51.0
Non-GAAP interest and other income (expense), net	$ 4.4	$ 3.8
Diluted share count (GAAP)	108	110

____________________________

⁽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 $161.1 million. The Company also had licensing billings of $63.6 million, product revenue of $73.4 million, and contract and other revenue of $29.5 million. The Company had total GAAP cost of revenue of $31.5 million and operating expenses of $71.7 million. The Company also had total non-GAAP operating expenses of $89.1 million (including non-GAAP cost of revenue of $29 million). The Company had GAAP diluted net income per share of $0.58. The Company’s basic share count was 107 million shares and its diluted share count was 108 million shares.

Cash, cash equivalents, and marketable securities as of December 31, 2024 were $481.8 million, an increase of $49.1 million as compared to September 30, 2024, mainly due to cash provided by operating activities of approximately $59 million. Cash provided by operating activities for the year ended December 31, 2024 was $230.6 million.

2025 First Quarter Outlook

The Company will discuss its full revenue guidance for the first quarter of 2025 during its upcoming conference call. The following table sets forth first quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$59 – $65	$59 – $65
Product revenue	$72 – $78	$72 – $78
Contract and other revenue	$22 – $28	$22 – $28
Total operating costs and expenses	$105 – $101	$91- $87
Interest and other income (expense), net	$4	$4
Diluted share count	108	108

____________________________

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

For the first quarter of 2025, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $56 million and $62 million, product revenue to be between $72 million and $78 million and contract and other revenue to be between $22 million and $28 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 $105 million and $101 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $91 million and $87 million. These expectations also assume a tax rate of 20% and diluted share count of 108 million, and exclude stock-based compensation expense of $12 million and amortization of acquired intangible assets of $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 will be 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 (+1) 929-458-6194 (international) with ID# 691793.

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/divestiture-related costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges (recoveries), (gain) loss on divestiture, expense on abandoned operating leases, change in fair value of earn-out liability, gain on sale of non-marketable equity security, 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/divestiture-related 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.

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

(Gain) loss on divestiture. Reflects the (gain) loss on the sale of the Company’s PHY IP business. The Company excludes these charges (benefits) because such charges (benefits) are not directly related to ongoing business results and do not reflect expected future operating expenses (benefits).

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.

Gain on sale of non-marketable equity security. The Company has excluded gain on sale of non-marketable equity security as this is not a reflection of 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 22 percent and 24 percent for 2024 and 2023, respectively, 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 first quarter of 2025 and related drivers, and the Company’s ability to effectively manage market challenges. 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. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact

Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	December 31, 2024	December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$ 99,775	$ 94,767
Marketable securities	382,023	331,077
Accounts receivable	122,813	82,925
Unbilled receivables	25,070	50,872
Inventories	44,634	36,154
Prepaids and other current assets	15,942	34,850
Total current assets	690,257	630,645
Intangible assets, net	17,059	28,769
Goodwill	286,812	286,812
Property, plant and equipment, net	75,509	67,808
Operating lease right-of-use assets	21,454	21,497
Deferred tax assets	136,466	127,892
Income taxes receivable	109,947	88,768
Other assets	5,632	6,036
Total assets	$ 1,343,136	$ 1,258,227

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$ 18,522	$ 18,074
Accrued salaries and benefits	19,193	17,504
Deferred revenue	19,903	17,393
Income taxes payable	1,264	5,099
Operating lease liabilities	5,617	4,453
Other current liabilities	17,313	26,598
Total current liabilities	81,812	89,121
Long-term operating lease liabilities	24,534	26,255
Long-term income taxes payable	109,383	78,947
Other long-term liabilities	6,715	25,803
Total long-term liabilities	140,632	131,005
Total stockholders’ equity	1,120,692	1,038,101
Total liabilities and stockholders’ equity	$ 1,343,136	$ 1,258,227

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended December 31,		Years Ended December 31,
(In thousands, except per share amounts)	2024	2023	2024	2023
Revenue:
Product revenue	$ 73,369	$ 53,698	$ 246,815	$ 224,632
Royalties	58,211	52,412	226,172	150,110
Contract and other revenue	29,522	16,115	83,637	86,375
Total revenue	161,102	122,225	556,624	461,117
Cost of revenue:
Cost of product revenue	28,494	19,941	95,875	84,495
Cost of contract and other revenue	721	1,123	3,028	5,403
Amortization of acquired intangible assets	2,300	3,052	11,204	13,524
Total cost of revenue	31,515	24,116	110,107	103,422
Gross profit	129,587	98,109	446,517	357,695
Operating expenses:
Research and development	43,698	35,985	162,881	156,827
Sales, general and administrative	27,998	25,665	104,094	108,149
Amortization of acquired intangible assets	30	195	506	1,217
Restructuring and other charges (recoveries)	—	(26)	—	9,368
(Gain) loss on divestiture	—	59	—	(90,784)
Impairment of assets	—	—	1,071	10,045
Change in fair value of earn-out liability	—	1,100	(5,044)	9,234
Total operating expenses	71,726	62,978	263,508	204,056
Operating income	57,861	35,131	183,009	153,639
Interest income and other income (expense), net	4,796	4,215	18,450	11,327
Loss on fair value adjustment of derivatives, net	—	—	—	(240)
Gain on sale of non-marketable equity security	—	23,924	—	23,924
Interest expense	(352)	(377)	(1,416)	(1,490)
Interest and other income (expense), net	4,444	27,762	17,034	33,521
Income before income taxes	62,305	62,893	200,043	187,160
Provision for (benefit from) income taxes	103	4,348	20,222	(146,744)
Net income	$ 62,202	$ 58,545	$ 179,821	$ 333,904
Net income per share:
Basic	$ 0.58	$ 0.54	$ 1.67	$ 3.09
Diluted	$ 0.58	$ 0.53	$ 1.65	$ 3.01
Weighted average shares used in per share calculation:
Basic	106,716	107,703	107,438	108,183
Diluted	108,082	110,065	109,041	110,889

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

	Three Months Ended
	December 31,
(In thousands)	2024	2023
Cost of product revenue	$ 28,494	$ 19,941
Adjustment:
Stock-based compensation expense	(172)	(145)
Non-GAAP cost of product revenue	$ 28,322	$ 19,796

Total operating expenses	$ 71,726	$ 62,978
Adjustments:
Stock-based compensation expense	(11,563)	(10,389)
Acquisition/divestiture-related costs and retention bonus expense	(22)	(285)
Amortization of acquired intangible assets	(30)	(195)
Restructuring and other recoveries	—	26
Loss on divestiture	—	(59)
Expense on abandoned operating leases	—	(3)
Change in fair value of earn-out liability	—	(1,100)
Non-GAAP total operating expenses	$ 60,111	$ 50,973

Interest and other income (expense), net	$ 4,444	$ 27,762
Adjustment:
Gain on sale of non-marketable equity security	—	(23,924)
Non-GAAP interest and other income (expense), net	$ 4,444	$ 3,838

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

2025 First Quarter Outlook	Three Months Ended March 31, 2025
(In millions)	Low	High
Forward-looking operating costs and expenses	$ 105	$ 101
Adjustments:
Stock-based compensation expense	(12)	(12)
Amortization of acquired intangible assets	(2)	(2)
Forward-looking Non-GAAP operating costs and expenses	$ 91	$ 87

Rambus Reports Third Quarter 2024 Financial Results

Delivered $66.4 million in product revenue, up 17% sequentially and 27% year over year
Achieved strong sequential earnings growth and generated excellent cash from operations of $62.1 million
Unveiled industry-first complete chipsets for next-generation, industry-standard DDR5 MRDIMMs and RDIMMs for the data center and AI

SAN JOSE, Calif. – October 28, 2024 – 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, 2024. GAAP revenue for the third quarter was $145.5 million, licensing billings were $65.4 million, product revenue was $66.4 million, and contract and other revenue was $15.0 million. The Company also generated $62.1 million in cash provided by operating activities in the third quarter.

“We delivered strong sequential growth in Q3, fueled by a double-digit increase in product revenue, and generated excellent cash from operations,” said Luc Seraphin, chief executive officer of Rambus. “Building on our strong execution and strategic investment in new leadership products, we introduced the industry’s first complete chipsets for industry-standard DDR5 MRDIMM 12800 and RDIMM 8000 to address the rising performance needs of the data center and AI. These new chips represent a significant expansion of our addressable market and support the company’s long-term growth.”

Quarterly Financial Review – GAAP	Three Months Ended September 30,
(In millions, except for percentages and per share amounts)	2024	2023
Revenue
Product revenue	$66.4	$52.2
Royalties	64.1	28.9
Contract and other revenue	15.0	24.2
Total revenue	145.5	105.3
Cost of product revenue	24.6	19.4
Cost of contract and other revenue	0.8	1.3
Amortization of acquired intangible assets (included in total cost of revenue)	2.8	3.3
Total operating expenses (benefits) ⁽¹⁾	62.7	(23.6)
Operating income	$54.6	$104.9
Operating margin	38 %	100 %
Net income	$48.7	$103.2
Diluted net income per share	$0.45	$0.93
Net cash provided by operating activities	$62.1	$51.6

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.1 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended September 30,
(In millions)	2024	2023
Licensing billings (operational metric) ⁽²⁾	$65.4	$57.9
Product revenue (GAAP)	$66.4	$52.2
Contract and other revenue (GAAP)	$15.0	$24.2
Non-GAAP cost of product revenue	$24.4	$19.2
Cost of contract and other revenue (GAAP)	$0.8	$1.3
Non-GAAP total operating expenses	$55.3	$52.4
Non-GAAP interest and other income (expense), net	$4.2	$1.9
Diluted share count (GAAP)	108	111

_________________________________________

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

GAAP revenue for the quarter was $145.5 million. The Company also had licensing billings of $65.4 million, product revenue of $66.4 million, and contract and other revenue of $15.0 million. The Company had total GAAP cost of revenue of $28.1 million and operating expenses of $62.7 million. The Company also had total non-GAAP operating expenses of $80.5 million (including non-GAAP cost of revenue of $25.2 million). The Company had GAAP diluted net income per share of $0.45. The Company’s basic share count was 107 million shares and its diluted share count was 108 million shares.

Cash, cash equivalents, and marketable securities as of September 30, 2024 were $432.7 million, which remained flat from June 30, 2024, mainly due to $62.1 million in cash provided by operating activities, offset by $50 million paid in connection with a share repurchase program and $9.9 million paid to acquire property, plant and equipment.

2024 Fourth Quarter Outlook

The Company will discuss its full revenue guidance for the fourth quarter of 2024 during its upcoming conference call. The following table sets forth the fourth quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$57 – $63	$57 – $63
Product revenue (GAAP)	$72 – $78	$72 – $78
Contract and other revenue (GAAP)	$22 – $28	$22 – $28
Total operating costs and expenses	$101 – $97	$86 – $82
Interest and other income (expense), net	$4	$4
Diluted share count	108	108

_________________________________________

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

For the fourth quarter of 2024, the Company expects licensing billings to be between $57 million and $63 million. The Company also expects royalty revenue to be between $54 million and $60 million, product revenue to be between $72 million and $78 million, and contract and other revenue to be between $22 million and $28 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 $101 million and $97 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $86 million and $82 million. These expectations also assume a tax rate of 22% and a diluted share count of 108 million, and exclude stock-based compensation expense of $13 million and amortization of acquired intangible assets of $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: (866) 813-9403 (domestic) or (+1) 929-458-6194 (international) with ID# 719712.

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/divestiture costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges (benefits), expense on abandoned operating leases, facility restoration costs, gain on divestiture, change in fair value of earn-out liability, impairment of assets, 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:

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.

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.

Gain on divestiture. Reflects the gain on the sale of the Company’s PHY IP business. The Company excludes these charges (benefits) because such charges (benefits) are not directly related to ongoing business results and do not reflect expected future operating expenses (benefits).

Impairment of assets. These charges primarily consist of non-cash charges to property, plant and equipment assets, which are excluded because such charges are non-recurring and do not reduce the Company’s liquidity.

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 fourth quarter of 2024 and related drivers, and the Company’s ability to effectively manage market challenges. 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. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	September 30, 2024	December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$113,980	$94,767
Marketable securities	318,717	331,077
Accounts receivable	87,198	82,925
Unbilled receivables	30,778	50,872
Inventories	48,905	36,154
Prepaids and other current assets	12,435	34,850
Total current assets	612,013	630,645
Intangible assets, net	19,389	28,769
Goodwill	286,812	286,812
Property, plant and equipment, net	73,374	67,808
Operating lease right-of-use assets	21,039	21,497
Deferred tax assets	129,348	127,892
Income taxes receivable	104,270	88,768
Other assets	5,325	6,036
Total assets	$1,251,570	$1,258,227

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$20,365	$18,074
Accrued salaries and benefits	13,966	17,504
Deferred revenue	18,404	17,393
Income taxes payable	1,114	5,099
Operating lease liabilities	5,397	4,453
Other current liabilities	14,881	26,598
Total current liabilities	74,127	89,121
Long-term liabilities:
Long-term operating lease liabilities	24,794	26,255
Long-term income taxes payable	101,350	78,947
Other long-term liabilities	12,314	25,803
Total long-term liabilities	138,458	131,005
Total stockholders’ equity	1,038,985	1,038,101
Total liabilities and stockholders’ equity	$ 1,251,570	$ 1,258,227

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
(In thousands, except per share amounts)	2024	2023	2024	2023
Revenue:
Product revenue	$66,394	$52,181	$173,446	$170,934
Royalties	64,105	28,857	167,961	97,698
Contract and other revenue	15,014	24,260	54,115	70,260
Total revenue	145,513	105,298	395,522	338,892
Cost of revenue:
Cost of product revenue	24,554	19,388	67,381	64,554
Cost of contract and other revenue	752	1,295	2,307	4,280
Amortization of acquired intangible assets	2,796	3,349	8,904	10,472
Total cost of revenue	28,102	24,032	78,592	79,306
Gross profit	117,411	81,266	316,930	259,586
Operating expenses (benefits):
Research and development	41,299	37,368	119,183	120,842
Sales, general and administrative	25,867	25,333	76,096	82,484
Amortization of acquired intangible assets	94	258	476	1,022
Restructuring and other charges (recoveries)	—	(100)	—	9,394
Gain on divestiture	—	(90,843)	—	(90,843)
Impairment of assets	—	10,045	1,071	10,045
Change in fair value of earn-out liability	(4,544)	(5,666)	(5,044)	8,134
Total operating expenses (benefits)	62,716	(23,605)	191,782	141,078
Operating income	54,695	104,871	125,148	118,508
Interest income and other income (expense), net	4,667	2,715	13,654	7,112
Loss on fair value adjustment of derivatives, net	—	—	—	(240)
Interest expense	(327)	(356)	(1,064)	(1,113)
Interest and other income (expense), net	4,340	2,359	12,590	5,759
Income before income taxes	59,035	107,230	137,738	124,267
Provision for (benefit from) income taxes	10,370	4,032	20,119	(151,092)
Net income	$48,665	$103,198	$117,619	$275,359
Net income per share:
Basic	$0.45	$0.95	$1.09	$2.54
Diluted	$0.45	$0.93	$1.08	$2.48
Weighted average shares used in per share calculation
Basic	107,235	108,317	107,681	108,412
Diluted	108,474	110,775	109,318	111,179

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

	Three Months Ended September 30,
(In thousands)	2024	2023
Cost of product revenue	$ 24,554	$ 19,388
Adjustment:
Stock-based compensation expense	(117)	(149)
Non-GAAP cost of product revenue	$ 24,437	$ 19,239

Total operating expenses (benefits)	$ 62,716	$(23,605)
Adjustments:
Stock-based compensation expense	(11,881)	(9,889)
Acquisition-related costs and retention bonus expense	(17)	(37)
Amortization of acquired intangible assets	(94)	(258)
Restructuring and other recoveries	—	100
Expense on abandoned operating leases	—	(40)
Facility restoration costs	—	3
Severance costs	—	(373)
Gain on divestiture	—	90,843
Impairment of assets	—	(10,045)
Change in fair value of earn-out liability	4,544	5,666
Non-GAAP total operating expenses	$ 55,268	$ 52,365

Interest and other income (expense), net	$4,340	$2,359
Adjustment:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(163)	(426)
Non-GAAP interest and other income (expense), net	$4,177	$1,933

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

2024 Fourth Quarter Outlook	Three Months Ended December 31, 2024
(In millions)	Low	High
Forward-looking operating costs and expenses	$101.0	$ 97.0
Adjustments:
Stock-based compensation expense	(13.0)	(13.0)
Amortization of acquired intangible assets	(2.0)	(2.0)
Forward-looking Non-GAAP operating costs and expenses	$ 86.0	$ 82.0

Rambus Reports Second Quarter 2024 Financial Results

Achieved solid Q2 results in line with expectations and generated outstanding cash from operations of $70.4 million
Delivered $56.7 million in product revenue, up 13% sequentially
Continued product portfolio expansion with DDR5 server PMICs, Client Clock Driver, and PCIe 7 IP solutions

SAN JOSE, Calif. – July 29, 2024 – 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, 2024. GAAP revenue for the second quarter was $132.1 million, licensing billings were $61.5 million, product revenue was $56.7 million, and contract and other revenue was $19.0 million. The Company also generated $70.4 million in cash provided by operating activities in the second quarter.

“We delivered solid second quarter results with robust growth in product revenue and excellent cash from operations,” said Luc Seraphin, chief executive officer of Rambus. “Through continued execution and ongoing investment in our industry-leading product roadmap for data center and AI, we expect a strong third quarter driven again by double-digit sequential chip growth.”

Quarterly Financial Review – GAAP	Three Months Ended June 30,
(In millions, except for percentages and per share amounts)	2024	2023
Revenue
Product revenue	$ 56.7	$ 55.0
Royalties	56.4	40.7
Contract and other revenue	19.0	24.1
Total revenue	132.1	119.8
Cost of product revenue	22.8	18.7
Cost of contract and other revenue	1.0	1.3
Amortization of acquired intangible assets (included in total cost of revenue)	3.0	3.6
Total operating expenses ⁽¹⁾	65.0	84.5
Operating income	$ 40.3	$ 11.7
Operating margin	31 %	10 %
Net income	$ 36.1	$ 168.9
Diluted net income per share	$ 0.33	$ 1.51
Net cash provided by operating activities	$ 70.4	$ 50.4

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.2 million and $0.4 million for the three months ended June 30, 2024 and 2023, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended June 30,
(In millions)	2024	2023
Licensing billings (operational metric) ⁽²⁾	$ 61.5	$ 60.2
Product revenue (GAAP)	$ 56.7	$ 55.0
Contract and other revenue (GAAP)	$ 19.0	$ 24.1
Non-GAAP cost of product revenue	$ 22.7	$ 18.6
Cost of contract and other revenue (GAAP)	$ 1.0	$ 1.3
Non-GAAP total operating expenses	$ 53.4	$ 55.9
Non-GAAP interest and other income (expense), net	$ 3.9	$ 1.2
Diluted share count (GAAP)	109	112

_________________________________________

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

GAAP revenue for the quarter was $132.1 million. The Company also had licensing billings of $61.5 million, product revenue of $56.7 million, and contract and other revenue of $19.0 million. The Company had total GAAP cost of revenue of $26.8 million and operating expenses of $65.0 million. The Company also had total non-GAAP operating expenses of $77.1 million (including non-GAAP cost of revenue of $23.7 million). The Company had GAAP diluted net income per share of $0.33. The Company’s basic share count was 108 million shares and its diluted share count was 109 million shares.

Cash, cash equivalents, and marketable securities as of June 30, 2024 were $432.9 million, an increase of $41.8 million from March 31, 2024, mainly due to $70.4 million in cash provided by operating activities, offset by $12.5 million paid in connection with a share repurchase program and $11.3 million paid to acquire property, plant and equipment.

2024 Third Quarter Outlook

The Company will discuss its full revenue guidance for the third quarter of 2024 during its upcoming conference call. The following table sets forth the third quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$60 – $66	$60 – $66
Product revenue (GAAP)	$62 – $68	$62 – $68
Contract and other revenue (GAAP)	$17 – $23	$17 – $23
Total operating costs and expenses	$97 – $93	$82 – $78
Interest and other income (expense), net	$4	$4
Diluted share count	109	109

_________________________________________

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

For the third quarter of 2024, the Company expects licensing billings to be between $60 million and $66 million. The Company also expects royalty revenue to be between $59 million and $65 million, product revenue to be between $62 million and $68 million, and contract and other revenue to be between $17 million and $23 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 $97 million and $93 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $82 million and $78 million. These expectations also assume a tax rate of 22% and a diluted share count of 109 million, and exclude stock-based compensation expense of $12 million and amortization of acquired intangible assets of $3 million.

Conference Call

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, restructuring and other charges, expense on abandoned operating leases, facility restoration costs, change in fair value of earn-out liability, impairment of assets, 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:

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 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.

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 2024 and related drivers, and the Company’s ability to effectively manage market challenges. 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. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	June 30, 2024	December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$ 124,578	$ 94,767
Marketable securities	308,306	331,077
Accounts receivable	83,210	82,925
Unbilled receivables	29,493	50,872
Inventories	52,596	36,154
Prepaids and other current assets	11,975	34,850
Total current assets	610,158	630,645
Intangible assets, net	22,279	28,769
Goodwill	286,812	286,812
Property, plant and equipment, net	74,916	67,808
Operating lease right-of-use assets	21,760	21,497
Unbilled receivables	4,391	4,423
Deferred tax assets	130,163	127,892
Income taxes receivable	98,683	88,768
Other assets	1,461	1,613
Total assets	$ 1,250,623	$ 1,258,227

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$ 26,970	$ 18,074
Accrued salaries and benefits	15,880	17,504
Deferred revenue	15,385	17,393
Income taxes payable	1,005	5,099
Operating lease liabilities	5,033	4,453
Other current liabilities	20,761	26,598
Total current liabilities	85,034	89,121
Long-term liabilities:
Long-term operating lease liabilities	25,780	26,255
Long-term income taxes payable	92,728	78,947
Deferred tax liabilities	3,949	4,462
Other long-term liabilities	14,240	21,341
Total long-term liabilities	136,697	131,005
Total stockholders’ equity	1,028,892	1,038,101
Total liabilities and stockholders’ equity	$ 1,250,623	$ 1,258,227

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands, except per share amounts)	2024	2023	2024	2023
Revenue:
Product revenue	$ 56,692	$ 54,978	$ 107,052	$ 118,753
Royalties	56,380	40,672	103,856	68,841
Contract and other revenue	19,066	24,182	39,101	46,000
Total revenue	132,138	119,832	250,009	233,594
Cost of revenue:
Cost of product revenue	22,779	18,743	42,827	45,166
Cost of contract and other revenue	1,000	1,294	1,555	2,985
Amortization of acquired intangible assets	3,052	3,561	6,108	7,123
Total cost of revenue	26,831	23,598	50,490	55,274
Gross profit	105,307	96,234	199,519	178,320
Operating expenses:
Research and development	40,525	41,576	77,884	83,474
Sales, general and administrative	24,402	26,187	50,229	57,151
Amortization of acquired intangible assets	187	382	382	764
Restructuring and other charges	—	9,494	—	9,494
Impairment of assets	1,071	—	1,071	—
Change in fair value of earn-out liability	(1,200)	6,900	(500)	13,800
Total operating expenses	64,985	84,539	129,066	164,683
Operating income	40,322	11,695	70,453	13,637
Interest income and other income (expense), net	4,400	2,236	8,987	4,397
Loss on fair value adjustment of derivatives, net	—	—	—	(240)
Interest expense	(371)	(376)	(737)	(757)
Interest and other income (expense), net	4,029	1,860	8,250	3,400
Income before income taxes	44,351	13,555	78,703	17,037
Provision for (benefit from) income taxes	8,295	(155,325)	9,749	(155,124)
Net income	$ 36,056	$ 168,880	$ 68,954	$ 172,161
Net income per share:
Basic	$ 0.33	$ 1.55	$ 0.64	$ 1.59
Diluted	$ 0.33	$ 1.51	$ 0.63	$ 1.55
Weighted average shares used in per share calculation
Basic	107,721	109,039	107,906	108,561
Diluted	109,047	111,601	109,628	111,373

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

	Three Months Ended June 30,
(In thousands)	2024	2023
Cost of product revenue	$ 22,779	$ 18,743
Adjustment:
Stock-based compensation expense	(122)	(151)
Non-GAAP cost of product revenue	$ 22,657	$ 18,592

Total operating expenses	$ 64,985	$ 84,539
Adjustments:
Stock-based compensation expense	(11,528)	(11,224)
Acquisition-related costs and retention bonus expense	(12)	(478)
Amortization of acquired intangible assets	(187)	(382)
Restructuring and other charges	—	(9,494)
Expense on abandoned operating leases	—	(195)
Facility restoration costs	—	(10)
Impairment of assets	(1,071)	—
Change in fair value of earn-out liability	1,200	(6,900)
Non-GAAP total operating expenses	$ 53,387	$ 55,856

Interest and other income (expense), net	$ 4,029	$ 1,860
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(118)	(627)
Non-GAAP interest and other income (expense), net	$ 3,911	$ 1,233

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

2024 Third Quarter Outlook	Three Months Ended September 30, 2024
(In millions)	Low	High
Forward-looking operating costs and expenses	$ 97.0	$ 93.0
Adjustments:
Stock-based compensation expense	(12.0)	(12.0)
Amortization of acquired intangible assets	(3.0)	(3.0)
Forward-looking Non-GAAP operating costs and expenses	$ 82.0	$ 78.0

Rambus Reports First Quarter 2024 Financial Results

Delivered solid Q1 results and expanded leadership offerings for the data center
Completed $50.0 million accelerated share repurchase program
Launched industry-leading family of DDR5 PMICs for AI and traditional servers

SAN JOSE, Calif. – April 29, 2024 – 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, 2024. GAAP revenue for the first quarter was $117.9 million, licensing billings were $63.2 million, product revenue was $50.4 million, and contract and other revenue was $20.0 million. The Company also generated $39.1 million in cash provided by operating activities in the first quarter.

“Through strong execution and strategic focus on data center and AI, we delivered solid first quarter results,” said Luc Seraphin, chief executive officer of Rambus. “We expanded our market opportunity with the introduction of new leadership products, and continue to drive the long-term profitable growth of the company while consistently returning value to our stockholders, including a total of $350 million in cash returned over the past three years.”

Quarterly Financial Review – GAAP	Three Months Ended March 31,
(In millions, except for percentages and per share amounts)	2024	2023
Revenue
Product revenue	$50.4	$63.8
Royalties	47.5	28.2
Contract and other revenue	20.0	21.8
Total revenue	117.9	113.8
Cost of product revenue	20.0	26.4
Cost of contract and other revenue	0.6	1.7
Amortization of acquired intangible assets (included in total cost of revenue)	3.1	3.6
Total operating expenses ⁽¹⁾	64.1	80.2
Operating income	$30.1	$ 1.9
Operating margin	26%	2%
Net income	$32.9	$3.3
Diluted net income per share	$0.30	$0.03
Net cash provided by operating activities	$39.1	$38.9

_________________________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.2 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended March 31,
(In millions)	2024	2023
Licensing billings (operational metric) ⁽²⁾	$63.2	$63.4
Product revenue (GAAP)	$50.4	$63.8
Contract and other revenue (GAAP)	$20.0	$21.8
Non-GAAP cost of product revenue	$19.9	$26.3
Cost of contract and other revenue (GAAP)	$0.6	$1.7
Non-GAAP total operating expenses	$53.7	$58.3
Non-GAAP interest and other income (expense), net	$4.0	$0.9
Diluted share count (GAAP)	110	111

_________________________________________

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

GAAP revenue for the quarter was $117.9 million. The Company also had licensing billings of $63.2 million, product revenue of $50.4 million, and contract and other revenue of $20.0 million. The Company had total GAAP cost of revenue of $23.7 million and operating expenses of $64.1 million. The Company also had total non-GAAP operating expenses of $74.2 million (including non-GAAP cost of revenue of $20.5 million). The Company had GAAP diluted net income per share of $0.30. The Company’s basic share count was 108 million shares and its diluted share count was 110 million shares.

Cash, cash equivalents, and marketable securities as of March 31, 2024 were $391.1 million, a decrease of $34.8 million from December 31, 2023, mainly due to $50.0 million paid in connection with an accelerated share repurchase program, $37.7 million in payments of taxes on restricted stock units, offset by $39.1 million in cash provided by operating activities and $22.8 million in proceeds from the sale of a non-marketable equity security.

2024 Second Quarter Outlook

The Company will discuss its full revenue guidance for the second quarter of 2024 during its upcoming conference call. The following table sets forth the second quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$61 – $67	$61 – $67
Product revenue (GAAP)	$52 – $58	$52 – $58
Contract and other revenue (GAAP)	$17 – $23	$17 – $23
Total operating costs and expenses	$95 – $91	$80 – $76
Interest and other income (expense), net	$3	$3
Diluted share count	109	109

_________________________________________

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

For the second quarter of 2024, the Company expects licensing billings to be between $61 million and $67 million. The Company also expects royalty revenue to be between $55 million and $61 million, product revenue to be between $52 million and $58 million and contract and other revenue to be between $17 million and $23 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 $95 million and $91 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $80 million and $76 million. These expectations also assume non-GAAP interest and other income (expense), net, of $3 million, a tax rate of 22% and a diluted share count of 109 million, and exclude stock-based compensation expense of $12 million and amortization of acquired intangible assets of $3 million.

Conference Call

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, facility restoration costs, change in fair value of earn-out liability, loss on fair value adjustment of derivatives, net, non-cash interest expense on convertible notes 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:

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

Non-cash interest expense on convertible notes. The Company incurred non-cash interest expense related to its convertible notes through the first quarter of 2023, at which point the remaining convertible notes matured. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with peer companies and to more accurately reflect the Company’s ongoing operations.

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 solutions 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, product and investment strategies, and the Company’s outlook and financial guidance for the second quarter of 2024 and related drivers, and the Company’s ability to effectively manage market challenges. 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. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	March 31, 2024	December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$112,614	$94,767
Marketable securities	278,443	331,077
Accounts receivable	86,940	82,925
Unbilled receivables	38,484	50,872
Inventories	47,599	36,154
Prepaids and other current assets	12,376	34,850
Total current assets	576,456	630,645
Intangible assets, net	25,518	28,769
Goodwill	286,812	286,812
Property, plant and equipment, net	67,277	67,808
Operating lease right-of-use assets	21,574	21,497
Unbilled receivables	3,980	4,423
Deferred tax assets	131,885	127,892
Income taxes receivable	93,926	88,768
Other assets	1,408	1,613
Total assets	$1,208,836	$1,258,227

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$24,775	$18,074
Accrued salaries and benefits	12,687	17,504
Deferred revenue	16,399	17,393
Income taxes payable	3,899	5,099
Operating lease liabilities	4,722	4,453
Other current liabilities	20,125	26,598
Total current liabilities	82,607	89,121
Long-term liabilities:
Long-term operating lease liabilities	25,899	26,255
Long-term income taxes payable	85,569	78,947
Deferred tax liabilities	4,205	4,462
Other long-term liabilities	18,964	21,341
Total long-term liabilities	134,637	131,005
Total stockholders’ equity	991,592	1,038,101
Total liabilities and stockholders’ equity	$1,208,836	$1,258,227

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2024	2023
Revenue:
Product revenue	$50,360	$63,775
Royalties	47,476	28,169
Contract and other revenue	20,035	21,818
Total revenue	117,871	113,762
Cost of revenue:
Cost of product revenue	20,048	26,423
Cost of contract and other revenue	555	1,691
Amortization of acquired intangible assets	3,056	3,562
Total cost of revenue	23,659	31,676
Gross profit	94,212	82,086
Operating expenses:
Research and development	37,359	41,898
Sales, general and administrative	25,827	30,964
Amortization of acquired intangible assets	195	382
Change in fair value of earn-out liability	700	6,900
Total operating expenses	64,081	80,144
Operating income	30,131	1,942
Interest income and other income (expense), net	4,587	2,161
Loss on fair value adjustment of derivatives, net	—	(240)
Interest expense	(366)	(381)
Interest and other income (expense), net	4,221	1,540
Income before income taxes	34,352	3,482
Provision for income taxes	1,454	201
Net income	$32,898	$3,281
Net income per share:
Basic	$0.30	$0.03
Diluted	$0.30	$0.03
Weighted average shares used in per share calculation
Basic	108,090	108,277
Diluted	110,037	111,153

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

	Three Months Ended March 31,
(In thousands)	2024	2023
Cost of product revenue	$20,048	$26,423
Adjustment:
Stock-based compensation expense	(124)	(131)
Non-GAAP cost of product revenue	$19,924	$26,292

Total operating expenses	$64,081	$80,144
Adjustments:
Stock-based compensation expense	(9,372)	(12,932)
Acquisition-related costs and retention bonus expense	(111)	(825)
Amortization of acquired intangible assets	(195)	(382)
Expense on abandoned operating leases	—	(521)
Facility restoration costs	—	(316)
Change in fair value of earn-out liability	(700)	(6,900)
Non-GAAP total operating expenses	$53,703	$58,268

Interest and other income (expense), net	$4,221	$1,540
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(180)	(919)
Non-cash interest expense on convertible notes	—	3
Loss on fair value adjustment of derivatives, net	—	240
Non-GAAP interest and other income (expense), net	$4,041	$864

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

2024 Second Quarter Outlook	Three Months Ended June 30, 2024
(In millions)	Low	High
Forward-looking operating costs and expenses	$95.0	$91.0
Adjustments:
Stock-based compensation expense	(12.0)	(12.0)
Amortization of acquired intangible assets	(3.0)	(3.0)
Forward-looking Non-GAAP operating costs and expenses	$80.0	$76.0

Rambus Reports Fourth Quarter and Fiscal Year 2023 Financial Results

Delivered strong Q4 results with revenue and earnings at the high end of guidance
Generated $54.8 million in cash from operations in Q4
Produced quarterly product revenue of $53.7 million driven by memory interface chips
Launched industry’s first Gen4 DDR5 RCD for server memory modules

SAN JOSE, Calif. – February 5, 2024 – 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, 2023. GAAP revenue for the fourth quarter was $122.2 million; licensing billings were $66.2 million, product revenue was $53.7 million, and contract and other revenue was $16.1 million. The Company also generated $54.8 million in cash provided by operating activities in the fourth quarter.

“Through continued product leadership and outstanding execution on our strategy, we delivered a strong fourth quarter and full-year results that outpaced the overall semiconductor market,” said Luc Seraphin, chief executive officer of Rambus. “With our focus on high-performance solutions for the data center and AI, we are well positioned to drive the long-term profitable growth of the company and consistently return value to our stockholders.”

Quarterly Financial Review – GAAP	Three Months Ended December 31,
(In millions, except for percentages and per share amounts)	2023	2022
Revenue
Product revenue	$53.7	$67.2
Royalties	52.4	31.4
Contract and other revenue	16.1	23.8
Total revenue	122.2	122.4
Cost of product revenue	19.9	28.2
Cost of contract and other revenue	1.1	1.6
Amortization of acquired intangible assets (included in total cost of revenue)	3.1	3.6
Total operating expenses ⁽¹⁾	63.0	72.8
Operating income	$35.1	$16.2
Operating margin	29%	13%
Net income	$58.5	$15.9
Diluted net income per share	$0.53	$0.14

Net cash provided by operating activities	$54.8	$51.3

____________________________

⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.2 million and $0.4 million for the three months ended December 31, 2023 and 2022, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended December 31,
(In millions)	2023	2022
Licensing billings (operational metric)⁽²⁾	$66.2	$64.3
Product revenue (GAAP)	$53.7	$67.2
Contract and other revenue (GAAP)	$16.1	$23.8
Non-GAAP cost of product revenue	$19.8	$28.1
Cost of contract and other revenue (GAAP)	$1.1	$1.6
Non-GAAP total operating expenses	$51.0	$55.8
Non-GAAP interest and other income (expense), net	$3.6	$(0.7)
Diluted share count (GAAP)	110	111

____________________________

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

GAAP revenue for the quarter was $122.2 million. The Company also had licensing billings of $66.2 million, product revenue of $53.7 million, and contract and other revenue of $16.1 million. The Company had total GAAP cost of revenue of $24.1 million and operating expenses of $63.0 million. The Company also had total non-GAAP operating expenses of $71.9 million (including non-GAAP cost of revenue). The Company had GAAP diluted net income per share of $0.53. The Company’s basic share count was 108 million shares and its diluted share count was 110 million shares.

Cash, cash equivalents, and marketable securities as of December 31, 2023 were $425.8 million, an increase of $50.3 million as compared to September 30, 2023, mainly due to cash provided by operating activities of approximately $54.8 million. Cash provided by operating activities for the year ended December 31, 2023 was $195.8 million.

2024 First Quarter Outlook

The Company will discuss its full revenue guidance for the first quarter of 2024 during its upcoming conference call. The following table sets forth first quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$59 – $65	$59 – $65
Product revenue	$47 – $53	$47 – $53
Contract and other revenue	$17 – $23	$17 – $23
Total operating costs and expenses	$89 – $85	$75 – $71
Interest and other income (expense), net	$3	$3
Diluted share count	110	110

____________________________

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

For the first quarter of 2024, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $43 million and $49 million, product revenue to be between $47 million and $53 million and contract and other revenue to be between $17 million and $23 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 $89 million and $85 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $75 million and $71 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($3 million), tax rate of 22% and diluted share count of 110 million, and exclude stock-based compensation expense ($11 million), amortization expense ($3 million), and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($0 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 will be webcast and can be accessed via Rambus’ website at investor.rambus.com. A replay will be available following the call on the Rambus Investor Relations website or for the next week at the following numbers: (866) 813-9403 (domestic) or (+1) 929-458-6194 (international) with ID# 272129.

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/divestiture-related costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges (benefits), (gain) loss on divestiture, expense on abandoned operating leases, change in fair value of earn-out liability, gain on sale of non-marketable equity security, non-cash interest expense on convertible notes, 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:

Restructuring and other charges (benefits). These charges (benefits) 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.

Gain on sale of non-marketable equity security. The Company has excluded gain on sale of non-marketable equity security as this is not a reflection of the Company’s ongoing operations.

Non-cash interest expense on convertible notes. The Company incurred non-cash interest expense related to its convertible notes through the first quarter of 2023, at which point the remaining convertible notes matured. 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 2023 and 2022, 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, product and investment strategies, and the Company’s outlook and financial guidance for the first quarter of 2024 and related drivers, and the Company’s ability to effectively manage supply chain and other market challenges. 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. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contact
Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	December 31, 2023	December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$94,767	$125,334
Marketable securities	331,077	187,892
Accounts receivable	82,925	55,368
Unbilled receivables	50,872	125,698
Inventories	36,154	20,900
Prepaids and other current assets	34,850	12,022
Total current assets	630,645	527,214
Intangible assets, net	28,769	50,880
Goodwill	286,812	292,040
Property, plant and equipment, net	67,808	86,255
Operating lease right-of-use assets	21,497	24,143
Unbilled receivables	4,423	25,222
Deferred tax assets	130,268	3,031
Income tax receivable	84,298	1,064
Other assets	1,613	2,745
Total assets	$1,256,133	$1,012,594

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$18,074	$24,815
Accrued salaries and benefits	17,504	20,502
Convertible notes	—	10,378
Deferred revenue	17,393	23,861
Income taxes payable	5,099	18,137
Operating lease liabilities	4,453	5,024
Other current liabilities	26,598	23,992
Total current liabilities	89,121	126,709
Long-term operating lease liabilities	26,255	29,079
Long-term income taxes payable	76,853	5,892
Deferred tax liabilities	4,462	24,964
Other long-term liabilities	21,341	46,653
Total liabilities	218,032	233,297
Total stockholders’ equity	1,038,101	779,297
Total liabilities and stockholders’ equity	$1,256,133	$1,012,594

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended December 31,		Years Ended December 31,
(In thousands, except per share amounts)	2023	2022	2023	2022
Revenue:
Product revenue	$53,698	$67,178	$224,632	$227,068
Royalties	52,412	31,436	150,110	139,816
Contract and other revenue	16,115	23,753	86,375	87,909
Total revenue	122,225	122,367	461,117	454,793
Cost of revenue:
Cost of product revenue	19,941	28,209	84,495	88,976
Cost of contract and other revenue	1,123	1,615	5,403	4,668
Amortization of acquired intangible assets	3,052	3,560	13,524	13,935
Total cost of revenue	24,116	33,384	103,422	107,579
Gross profit	98,109	88,983	357,695	347,214
Operating expenses:
Research and development	35,985	40,121	156,827	158,769
Sales, general and administrative	25,665	27,309	108,149	106,718
Amortization of acquired intangible assets	195	415	1,217	1,674
Restructuring and other charges (benefits)	(26)	—	9,368	—
(Gain) loss on divestiture	59	—	(90,784)	—
Impairment of assets	—	—	10,045	—
Change in fair value of earn-out liability	1,100	5,000	9,234	3,111
Total operating expenses	62,978	72,845	204,056	270,272
Operating income	35,131	16,138	153,639	76,942
Interest income and other income (expense), net	4,215	835	11,327	7,771
Gain on fair value of equity security	—	—	—	3,547
Loss on extinguishment of debt	—	—	—	(83,626)
Loss on fair value adjustment of derivatives, net	—	—	(240)	(10,585)
Gain on sale of non-marketable equity security	23,924	—	23,924	—
Interest expense	(377)	(484)	(1,490)	(1,874)
Interest and other income (expense), net	27,762	351	33,521	(84,767)
Income (loss) before income taxes	62,893	16,489	187,160	(7,825)
Provision for (benefit from) income taxes	4,348	540	(146,744)	6,485
Net income (loss)	$58,545	$15,949	$333,904	$(14,310)
Net income (loss) per share:
Basic	$0.54	$0.15	$3.09	$(0.13)
Diluted	$0.53	$0.14	$3.01	$(0.13)
Weighted average shares used in per share calculation:
Basic	107,703	107,603	108,183	109,472
Diluted	110,065	110,820	110,889	109,472

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

	Three Months Ended
	December 31,
(In thousands)	2023	2022
Cost of product revenue	$19,941	$28,209
Adjustment:
Stock-based compensation expense	(145)	(144)
Non-GAAP cost of product revenue	$19,796	$28,065

Total operating expenses	$62,978	$72,845
Adjustments:
Stock-based compensation expense	(10,389)	(10,122)
Acquisition/divestiture-related costs and retention bonus expense	(285)	(1,028)
Amortization of acquired intangible assets	(195)	(415)
Restructuring and other benefits	26	—
Loss on divestiture	(59)	—
Expense on abandoned operating leases	(3)	(521)
Change in fair value of earn-out liability	(1,100)	(5,000)
Non-GAAP total operating expenses	$50,973	$55,759

Interest and other income (expense), net	$27,762	$351
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(246)	(1,029)
Gain on sale of non-marketable equity security	(23,924)	—
Non-cash interest expense on convertible notes	—	10
Non-GAAP interest and other income (expense), net	$3,592	$(668)

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

2024 First Quarter Outlook	Three Months Ended March 31, 2024
(In millions)	Low	High
Forward-looking operating costs and expenses	$89.1	$85.1
Adjustments:
Stock-based compensation expense	(11.0)	(11.0)
Amortization of acquired intangible assets	(3.1)	(3.1)
Forward-looking Non-GAAP operating costs and expenses	$75.0	$71.0

Forward-looking interest and other income (expense), net	$3.2	$3.2
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(0.2)	(0.2)
Forward-looking Non-GAAP interest and other income (expense), net	$3.0	$3.0

Rambus Reports Third Quarter 2023 Financial Results

Delivered strong Q3 results with revenue and earnings above the midpoint of guidance
Generated $51.6 million in cash from operations and completed $100.0 million accelerated share repurchase program
Completed the sale of the PHY IP business, strengthening focus on chips and digital IP
Produced quarterly product revenue of $52.2 million driven by memory interface chips

SAN JOSE, Calif. – October 30, 2023 – 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, 2023. GAAP revenue for the third quarter was $105.3 million, licensing billings were $57.9 million, product revenue was $52.2 million, and contract and other revenue was $24.2 million. The Company also generated $51.6 million in cash provided by operating activities in the third quarter.

“Rambus delivered a strong third quarter, as we continue to execute on our strategy, drive the company’s long-term profitable growth and consistently return value to our stockholders amidst challenging market conditions,” said Luc Seraphin, chief executive officer of Rambus. “We are well positioned to address the increasing memory performance requirements in the data center fueled by AI and other advanced workloads.”

Quarterly Financial Review – GAAP	Three Months Ended September 30,
(In millions, except for percentages and per share amounts)	2023	2022
Revenue
Product revenue	$52.2	$58.6
Royalties	28.9	29.9
Contract and other revenue	24.2	23.7
Total revenue	105.3	112.2
Cost of product revenue	19.4	21.9
Cost of contract and other revenue	1.3	1.5
Amortization of acquired intangible assets (included in total cost of revenue)	3.3	3.6
Total operating expenses (benefits) ⁽¹⁾	(23.6)	68.3
Operating income	$104.9	$16.9
Operating margin	100%	15%
Net income	$103.2	$0.9
Diluted net income per share	$0.93	$0.01
Net cash provided by operating activities	$51.6	$80.0

_________________________________________

⁽¹⁾Includes amortization of acquired intangible assets of approximately $0.3 million and $0.4 million for the three months ended September 30, 2023 and 2022, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended September 30,
(In millions)	2023	2022
Licensing billings (operational metric) ⁽²⁾	$57.9	$62.2
Product revenue (GAAP)	$52.2	$58.6
Contract and other revenue (GAAP)	$24.2	$23.7
Non-GAAP cost of product revenue	$19.2	$21.8
Cost of contract and other revenue (GAAP)	$1.3	$1.5
Non-GAAP total operating expenses	$52.4	$54.6
Non-GAAP interest and other income (expense), net	$1.9	$1.6
Diluted share count (GAAP)	111	112

_________________________________________

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

GAAP revenue for the quarter was $105.3 million. The Company also had licensing billings of $57.9 million, product revenue of $52.2 million, and contract and other revenue of $24.2 million. The Company had total GAAP cost of revenue of $24.0 million and operating benefits of $(23.6) million. The Company also had total non-GAAP operating expenses of $72.9 million (including non-GAAP cost of revenue of $20.5 million). The Company had GAAP diluted net income per share of $0.93, largely driven by a net gain on divestiture of $90.8 million from the sale of the Company’s PHY IP business in the third quarter. The Company’s basic share count was 108 million shares and its diluted share count was 111 million shares.

Cash, cash equivalents, and marketable securities as of September 30, 2023 were $375.5 million, an increase of $42.9 million from June 30, 2023, mainly due to $51.6 million in cash provided by operating activities and the net proceeds from the PHY IP business divestiture of $106.3 million, partly offset by $100.0 million paid in connection with an accelerated share repurchase program.

2023 Fourth Quarter Outlook

The Company will discuss its full revenue guidance for the fourth quarter of 2023 during its upcoming conference call. The following table sets forth fourth quarter outlook for other measures.

(In millions)	GAAP	Non-GAAP ⁽¹⁾
Licensing billings (operational metric) ⁽²⁾	$56 – $62	$56 – $62
Product revenue (GAAP)	$52 – $58	$52 – $58
Contract and other revenue (GAAP)	$17 – $23	$17 – $23
Total operating costs and expenses	$88 – $84	$73 – $69
Interest and other income (expense), net	$2	$2
Diluted share count	110	110

_________________________________________

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

For the fourth quarter of 2023, the Company expects licensing billings to be between $56 million and $62 million. The Company also expects royalty revenue to be between $42 million and $48 million, product revenue to be between $52 million and $58 million and contract and other revenue to be between $17 million and $23 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 $88 million and $84 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 $2 million, a tax rate of 24% and diluted share count of 110 million, and exclude stock-based compensation expense of $11 million, amortization of acquired intangible assets of $4 million, and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements of $0 million.

Conference Call

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, restructuring and other charges, expense on abandoned operating leases, facility restoration costs, gain on divestiture, impairment of assets, change in fair value of earn-out liability, gain on sale of equity security, loss on extinguishment of debt, loss on fair value adjustment of derivatives, net, realized loss on sale of marketable securities sold for the purpose of notes repurchase, 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:

Impairment of assets. These charges primarily consist of non-cash charges to long-lived assets and other assets resulting from the divestiture of the Company’s PHY IP business, and are excluded because such charges are non-recurring and do not reduce the Company’s liquidity.

Gain on sale of equity security. The Company has excluded gain on sale of equity security as this is not a reflection of the Company’s ongoing operations.

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 repurchasing its convertible notes as this is not a reflection of the Company’s ongoing operations.

Non-cash interest expense on convertible notes. The Company incurred non-cash interest expense related to its convertible notes through the first quarter of 2023, at which point the remaining convertible notes matured. 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 2023 and 2022, 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.

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 fourth quarter of 2023 and related drivers, and the Company’s ability to effectively manage supply chain and other market challenges. 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 potential adverse impacts related to, or arising from, 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
Desmond Lynch
Senior Vice President, Finance and Chief Financial Officer
(408) 462-8000
[email protected]

Rambus Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)	September 30, 2023	December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$131,957	$125,334
Marketable securities	243,588	187,892
Accounts receivable	65,101	55,368
Unbilled receivables	64,252	125,698
Inventories	34,615	20,900
Prepaids and other current assets	11,112	12,022
Total current assets	550,625	527,214
Intangible assets, net	32,015	50,880
Goodwill	286,812	292,040
Property, plant and equipment, net	73,466	86,255
Operating lease right-of-use assets	20,964	24,143
Deferred tax assets	131,020	3,031
Unbilled receivables	3,479	25,222
Income taxes receivable	84,487	1,064
Other assets	1,463	2,745
Total assets	$1,184,331	$1,012,594

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$15,682	$24,815
Accrued salaries and benefits	13,076	20,502
Convertible notes	—	10,378
Deferred revenue	17,459	23,861
Income taxes payable	8,638	18,137
Operating lease liabilities	4,174	5,024
Other current liabilities	25,167	23,992
Total current liabilities	84,196	126,709
Long-term liabilities:
Long-term operating lease liabilities	26,117	29,079
Long-term income taxes payable	77,655	5,892
Deferred tax liabilities	5,819	24,964
Other long-term liabilities	34,978	46,653
Total long-term liabilities	144,569	106,588
Total stockholders’ equity	955,566	779,297
Total liabilities and stockholders’ equity	$1,184,331	$1,012,594

Rambus Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
(In thousands, except per share amounts)	2023	2022	2023	2022
Revenue:
Product revenue	$52,181	$58,619	$170,934	$159,890
Royalties	28,857	29,878	97,698	108,380
Contract and other revenue	24,260	23,747	70,260	64,156
Total revenue	105,298	112,244	338,892	332,426
Cost of revenue:
Cost of product revenue	19,388	21,953	64,554	60,767
Cost of contract and other revenue	1,295	1,455	4,280	3,053
Amortization of acquired intangible assets	3,349	3,576	10,472	10,375
Total cost of revenue	24,032	26,984	79,306	74,195
Gross profit	81,266	85,260	259,586	258,231
Operating expenses (benefits):
Research and development	37,368	39,295	120,842	118,648
Sales, general and administrative	25,333	26,198	82,484	79,409
Amortization of acquired intangible assets	258	433	1,022	1,259
Restructuring and other charges (recoveries)	(100)	—	9,394	—
Gain on divestiture	(90,843)	—	(90,843)	—
Impairment of assets	10,045	—	10,045	—
Change in fair value of earn-out liability	(5,666)	2,411	8,134	(1,889)
Total operating expenses (benefits)	(23,605)	68,337	141,078	197,427
Operating income	104,871	16,923	118,508	60,804
Interest income and other income (expense), net	2,715	2,838	7,112	6,936
Gain on fair value of equity security	—	3,547	—	3,547
Loss on extinguishment of debt	—	(17,129)	—	(83,626)
Loss on fair value adjustment of derivatives, net	—	(2,302)	(240)	(10,585)
Interest expense	(356)	(437)	(1,113)	(1,390)
Interest and other income (expense), net	2,359	(13,483)	5,759	(85,118)
Income (loss) before income taxes	107,230	3,440	124,267	(24,314)
Provision for (benefit from) income taxes	4,032	2,501	(151,092)	5,945
Net income (loss)	$103,198	$939	$275,359	$(30,259)
Net income (loss) per share:
Basic	$0.95	$0.01	$2.54	$(0.27)
Diluted	$0.93	$0.01	$2.48	$(0.27)
Weighted average shares used in per share calculation
Basic	108,317	109,968	108,412	110,102
Diluted	110,775	111,962	111,179	110,102

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

	Three Months Ended September 30,
(In thousands)	2023	2022
Cost of product revenue	$19,388	$21,953
Adjustment:
Stock-based compensation expense	(149)	(142)
Non-GAAP cost of product revenue	$19,239	$21,811

Total operating expenses (benefits)	$(23,605)	$68,337
Adjustments:
Stock-based compensation expense	(9,889)	(8,730)
Acquisition-related costs and retention bonus expense	(37)	(1,627)
Amortization of acquired intangible assets	(258)	(433)
Restructuring and other recoveries	100	—
Expense on abandoned operating leases	(40)	(520)
Facility restoration costs	3	—
Severance costs	(373)	—
Gain on divestiture	90,843	—
Impairment of assets	(10,045)	—
Change in fair value of earn-out liability	5,666	(2,411)
Non-GAAP total operating expenses	$52,365	$54,616

Interest and other income (expense), net	$2,359	$(13,483)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(426)	(1,248)
Non-cash interest expense on convertible notes	—	33
Gain on sale of equity security	—	(3,547)
Loss on extinguishment of debt	—	17,129
Loss on fair value adjustment of derivatives, net	—	2,302
Realized loss on sale of marketable securities sold for the purpose of notes repurchase	—	450
Non-GAAP interest and other income (expense), net	$1,933	$1,636

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

2023 Fourth Quarter Outlook	Three Months Ended December 31, 2023
(In millions)	Low	High
Forward-looking operating costs and expenses	$87.5	$83.5
Adjustments:
Stock-based compensation expense	(11.0)	(11.0)
Amortization of acquired intangible assets	(3.5)	(3.5)
Forward-looking Non-GAAP operating costs and expenses	$73.0	$69.0

Forward-looking interest and other income (expense), net	$2.2	$2.2
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements	(0.2)	(0.2)
Forward-looking Non-GAAP interest and other income (expense), net	$2.0	$2.0

Rambus Reports Fourth Quarter And Fiscal Year 2024 Financial Results

Rambus Reports Third Quarter 2024 Financial Results

Rambus Reports Second Quarter 2024 Financial Results

Rambus Reports First Quarter 2024 Financial Results

Rambus Reports Fourth Quarter and Fiscal Year 2023 Financial Results

Rambus Reports Third Quarter 2023 Financial Results

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