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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rambus Inc | NASDAQ:RMBS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
2.92 | 6.01% | 51.50 | 49.16 | 51.75 | 51.68 | 49.875 | 50.41 | 2,792,992 | 01:00:00 |
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.
(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 $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.
(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.
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
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# 295037.
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:
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 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.
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.
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.
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.
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.
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.
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.
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 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.
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240729986257/en/
Desmond Lynch Senior Vice President, Finance and Chief Financial Officer (408) 462-8000 dlynch@rambus.com
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