Rambus Reports Third Quarter 2022 Financial Results

SAN JOSE, Calif. – October 31, 2022– 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, 2022. GAAP revenue for the third quarter was $112.2 million, licensing billings were $62.2 million, product revenue was $58.6 million, and contract and other revenue was $23.7 million. The Company also generated $80 million in cash provided by operating activities in the third quarter.

“Rambus had an excellent performance in the third quarter, exceeding guidance and delivering record cash and product revenue,” said Luc Seraphin, chief executive officer of Rambus. “Our strategic focus and strong execution in data center, combined with a diverse portfolio of offerings, drive the company’s long-term profitable growth and enable consistent capital returns to our stockholders.”

Quarterly Financial Review – GAAP	Three Months Ended September 30,
(In millions, except for percentages and per share amounts)	2022	2021
Revenue
Product revenue	$58.6	$36.7
Royalties	29.9	33.1
Contract and other revenue	23.7	11.5
Total revenue	112.2	81.3
Cost of product revenue	21.9	13.1
Cost of contract and other revenue	1.5	1.5
Amortization of acquired intangible assets (included in total cost of revenue)	3.6	3.8
Total operating expenses (1)	68.3	58.2
Operating income	$16.9	$4.7
Operating margin	15%	6%
Net income	$0.9	$3.7
Diluted net income per share	$0.01	$0.03
Net cash provided by operating activities	$80.0	$46.0

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⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.4 million for each of the three months ended September 30, 2022 and 2021.

Quarterly Financial Review – Supplemental Information(1)	Three Months Ended September 30,
(In millions)	2022	2021
Licensing billings (operational metric) (2)	$62.2	$66.1
Product revenue (GAAP)	$58.6	$36.7
Contract and other revenue (GAAP)	$23.7	$11.5
Non-GAAP cost of product revenue	$21.8	$13.1
Cost of contract and other revenue (GAAP)	$1.5	$1.5
Non-GAAP total operating expenses	$54.6	$48.2
Non-GAAP interest and other income (expense), net	$1.6	$(0.2)
Diluted share count (GAAP)	112	114

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⁽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 $112.2 million. The Company also had licensing billings of $62.2 million, product revenue of $58.6 million, and contract and other revenue of $23.7 million. The Company had GAAP cost of revenue of $27.0 million and operating expenses of $68.3 million. The Company also had total non-GAAP operating expenses of $77.9 million (including non-GAAP cost of revenue). The Company’s basic share count was 110 million shares and its diluted share count was 112 million shares.

Cash, cash equivalents, and marketable securities as of September 30, 2022 were $264.8 million, a decrease of $86.8 million from June 30, 2022, mainly due to $100 million paid in connection with an accelerated share repurchase program, $58.9 million paid in connection with the repayment of 2023 senior notes, $14.4 million paid in connection with the settlement of warrants, partially offset by $80 million in cash generated by operating activities and proceeds of $19.3 million from the settlement of senior convertible note hedges.

2022 Fourth Quarter Outlook

The Company will discuss its full revenue guidance for the fourth quarter of 2022 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)	$59 – $65	$59 – $65
Product revenue (GAAP)	$63 – $69	$63 – $69
Contract and other revenue (GAAP)	$21 – $27	$21 – $27
Total operating costs and expenses	$100 – $96	$86 – $82
Interest and other income (expense), net	$0	($1)
Diluted share count	110	110

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⁽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 fourth quarter of 2022, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $29 million and $35 million, product revenue to be between $63 million and $69 million and contract and other revenue to be between $21 million and $27 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 $100 million and $96 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $86 million and $82 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 110 million, and exclude stock-based compensation expense ($10 million), amortization expense ($4 million), non-cash interest expense ($0.1 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($1 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 (+44) 204-525-0658 (international) with ID# 714912.

Financial Tables

To read financial tables, click here