Rambus Reports Second Quarter 2022 Financial Results
SAN JOSE, Calif. – August 1, 2022– Rambus Inc. (NASDAQ:RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the second quarter ended June 30, 2022. GAAP revenue for the second quarter was $121.1 million, licensing billings were $66.1 million, product revenue was $53.3 million, and contract and other revenue was $19.8 million. The Company also generated $56.5 million in cash provided by operating activities in the second quarter.
“Rambus delivered a strong performance with another quarter of record product revenue from memory interface chips and sustained silicon IP momentum driving our results,” said Luc Seraphin, chief executive officer of Rambus. “We continue to address the growing needs of the data center with our diverse and expanding portfolio of offerings to fuel the company’s long-term profitable growth.”
Quarterly Financial Review – GAAP | Three Months Ended June 30, | |
(In millions, except for percentages and per share amounts) | 2022 | 2021 |
Revenue | ||
Product revenue | $53.3 | $31.2 |
Royalties | 48.0 | 41.9 |
Contract and other revenue | 19.8 | 11.8 |
Total revenue | 121.1 | 84.9 |
Cost of product revenue | 20.4 | 11.4 |
Cost of contract and other revenue | 1.0 | 1.0 |
Amortization of acquired intangible assets (included in total cost of revenue) | 3.4 | 4.5 |
Total operating expenses (1) | 60.8 | 53.9 |
Operating income | $35.5 | $14.1 |
Operating margin | 29 % | 17 % |
Net income | $35.0 | $11.2 |
Diluted net income per share | $0.31 | $0.10 |
Net cash provided by operating activities | $56.5 | $51.6 |
_________________________________________
(1) Includes amortization of acquired intangible assets of approximately $0.4 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively.
Quarterly Financial Review – Supplemental Information(1) | Three Months Ended June 30, | |
(In millions) | 2022 | 2021 |
Licensing billings (operational metric) (2) | $66.1 | $65.2 |
Product revenue (GAAP) | $53.3 | $31.2 |
Contract and other revenue (GAAP) | $19.8 | $11.8 |
Non-GAAP cost of product revenue | $20.3 | $11.4 |
Cost of contract and other revenue (GAAP) | $1.0 | $1.0 |
Non-GAAP total operating expenses | $54.9 | $43.7 |
Non-GAAP interest and other income (expense), net | $1.0 | $(0.8) |
Diluted share count (GAAP) | 113 | 115 |
_________________________________________
(1) See “Supplemental Reconciliation of GAAP to Non-GAAP Results” table included below.
(2) Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences relating to advanced payments for variable licensing agreements.
GAAP revenue for the quarter was $121.1 million, at the high end of the Company’s guidance. The Company also had licensing billings of $66.1 million, product revenue of $53.3 million, and contract and other revenue of $19.8 million. The Company had GAAP cost of revenue of $24.8 million and operating expenses of $60.8 million. The Company also had total non-GAAP operating expenses of $76.1 million (including non-GAAP cost of revenue). The Company had GAAP diluted net income per share of $0.31. The Company’s basic share count was 110 million shares and its diluted share count was 113 million shares.
Cash, cash equivalents, and marketable securities as of June 30, 2022 were $351.6 million, an increase of $7.9 million from March 31, 2022, mainly due to $56.5 million in cash generated by operating activities, partially offset by $24.7 million paid in connection with the repayment of 2023 senior notes and $16.1 million paid in connection with the acquisition of Hardent, Inc.
2022 Third Quarter Outlook
The Company will discuss its full revenue guidance for the third quarter of 2022 during its upcoming conference call. The following table sets forth third quarter outlook for other measures.
(In millions) | GAAP | Non-GAAP (1) |
Licensing billings (operational metric) (2) | $63 – $69 | $63 – $69 |
Product revenue (GAAP) | $51 – $57 | $51 – $57 |
Contract and other revenue (GAAP) | $18 – $24 | $18 – $24 |
Total operating costs and expenses | $94 – $90 | $81 – $77 |
Interest and other income (expense), net | $0 | ($1) |
Diluted share count | 113 | 113 |
_________________________________________
(1) See “Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates” table included below.
(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 2022, the Company expects licensing billings to be between $63 million and $69 million. The Company also expects royalty revenue to be between $29 million and $35 million, product revenue to be between $51 million and $57 million and contract and other revenue to be between $18 million and $24 million. Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for various product sales and solutions licensing, among other matters.
The Company also expects operating costs and expenses to be between $94 million and $90 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $81 million and $77 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($1 million), tax rate of 24% and diluted share count of 113 million, and exclude stock-based compensation expense ($9 million), amortization expense ($4 million), non-cash interest expense on convertible notes ($0.1 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($1 million).
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