Rambus Reports Fourth Quarter and Fiscal Year 2021 Financial Results

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

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

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

Net cash provided by operating activities	$72.2	$42.1

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

Quarterly Financial Review – Non-GAAP (including operational metric) (1)

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

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

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

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

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

2022 First Quarter Outlook

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

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

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

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

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

The Company also expects operating costs and expenses to be between $84 million and $80 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $73 million and $69 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($1 million), tax rate of 24% and diluted share count of 115 million, and exclude stock-based compensation expense ($7 million), amortization expense ($4 million), non-cash interest expense on convertible notes ($2 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($2 million).

Financial Tables

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