Rambus Reports Fourth Quarter and Fiscal Year 2023 Financial Results

SAN JOSE, Calif. – February 5, 2024 – 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, 2023. GAAP revenue for the fourth quarter was $122.2 million; licensing billings were $66.2 million, product revenue was $53.7 million, and contract and other revenue was $16.1 million. The Company also generated $54.8 million in cash provided by operating activities in the fourth quarter.

“Through continued product leadership and outstanding execution on our strategy, we delivered a strong fourth quarter and full-year results that outpaced the overall semiconductor market,” said Luc Seraphin, chief executive officer of Rambus. “With our focus on high-performance solutions for the data center and AI, we are well positioned to drive the long-term profitable growth of the company and consistently return value to our stockholders.”

Quarterly Financial Review – GAAP	Three Months Ended December 31,
(In millions, except for percentages and per share amounts)	2023	2022
Revenue
Product revenue	$53.7	$67.2
Royalties	52.4	31.4
Contract and other revenue	16.1	23.8
Total revenue	122.2	122.4
Cost of product revenue	19.9	28.2
Cost of contract and other revenue	1.1	1.6
Amortization of acquired intangible assets (included in total cost of revenue)	3.1	3.6
Total operating expenses ⁽¹⁾	63.0	72.8
Operating income	$35.1	$16.2
Operating margin	29%	13%
Net income	$58.5	$15.9
Diluted net income per share	$0.53	$0.14

Net cash provided by operating activities	$54.8	$51.3

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⁽¹⁾ Includes amortization of acquired intangible assets of approximately $0.2 million and $0.4 million for the three months ended December 31, 2023 and 2022, respectively.

Quarterly Financial Review – Supplemental Information⁽¹⁾	Three Months Ended December 31,
(In millions)	2023	2022
Licensing billings (operational metric)⁽²⁾	$66.2	$64.3
Product revenue (GAAP)	$53.7	$67.2
Contract and other revenue (GAAP)	$16.1	$23.8
Non-GAAP cost of product revenue	$19.8	$28.1
Cost of contract and other revenue (GAAP)	$1.1	$1.6
Non-GAAP total operating expenses	$51.0	$55.8
Non-GAAP interest and other income (expense), net	$3.6	$(0.7)
Diluted share count (GAAP)	110	111

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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 $122.2 million. The Company also had licensing billings of $66.2 million, product revenue of $53.7 million, and contract and other revenue of $16.1 million. The Company had total GAAP cost of revenue of $24.1 million and operating expenses of $63.0 million. The Company also had total non-GAAP operating expenses of $71.9 million (including non-GAAP cost of revenue). The Company had GAAP diluted net income per share of $0.53. The Company’s basic share count was 108 million shares and its diluted share count was 110 million shares.

Cash, cash equivalents, and marketable securities as of December 31, 2023 were $425.8 million, an increase of $50.3 million as compared to September 30, 2023, mainly due to cash provided by operating activities of approximately $54.8 million. Cash provided by operating activities for the year ended December 31, 2023 was $195.8 million.

2024 First Quarter Outlook

The Company will discuss its full revenue guidance for the first quarter of 2024 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	$47 – $53	$47 – $53
Contract and other revenue	$17 – $23	$17 – $23
Total operating costs and expenses	$89 – $85	$75 – $71
Interest and other income (expense), net	$3	$3
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.

For the first quarter of 2024, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $43 million and $49 million, product revenue to be between $47 million and $53 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 $89 million and $85 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $75 million and $71 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($3 million), tax rate of 22% and diluted share count of 110 million, and exclude stock-based compensation expense ($11 million), amortization expense ($3 million), and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($0 million).

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