RMBS Rambus Inc

• 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

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.

(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 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.

About Rambus Inc.

Rambus is a global semiconductor company dedicated to enabling the future of the data center and artificial intelligence (“AI”) by delivering innovative memory and security solutions that address the evolving needs of the industry. As a pioneer with approximately 35 years of advanced semiconductor design experience, Rambus is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of accelerating and securing data movement in the data center, edge, and client markets. Rambus is a leader in high-performance memory subsystems, offering a balanced and diverse portfolio of products encompassing chips and silicon intellectual property (IP). Focusing primarily on the data center, our innovative solutions maximize performance and security in computationally intensive systems. 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 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.

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

 

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250203515060/en/

Desmond Lynch Senior Vice President, Finance and Chief Financial Officer (408) 462-8000 dlynch@rambus.com