Rambus Reports Second Quarter Financial Results

Second Quarter Fiscal 2011 Business and Financial Highlights

• Acquired Cryptography Research Incorporated
• Signed five-year patent license agreement with Freescale Semiconductor
• Unveiled Pentelic™ lighting solutions, demonstrating unprecedented performance for LED-based lighting products
• Announced breakthrough clocking technology for high-speed interfaces
• Revenue of $66.2 million; non-GAAP customer licensing income of $73.0 million
• GAAP diluted loss per share of $0.10; non-GAAP diluted income per share of $0.11

Sunnyvale, California, United States - July 21, 2011 - Rambus Inc. (NASDAQ:RMBS), one of the world’s premier technology licensing companies, today reported financial results for the second quarter ended June 30, 2011.

GAAP Financial Results:

Revenue for the second quarter of 2011 was $66.2 million, up 6% sequentially from the first quarter of 2011 primarily due to the recognition ($25.0 million) of Samsung’s quarterly licensing payment to revenue in the second quarter of 2011. As compared to the second quarter of 2010, revenue was up 70% primarily due to the Samsung payment in the second quarter of 2011 as well as revenue recognized from agreements signed with Elpida and Nvidia in the second half of 2010. Revenue for the six months ended June 30, 2011 was $128.7 million, down 36% over the same period of last year, due to the initial recognition of revenue from the settlement agreement signed with Samsung during the first quarter of 2010.

Total operating costs and expenses for the second quarter of 2011 were $68.7 million, which included general litigation expenses of $11.5 million and Cryptography Research Inc. (“CRI”) related deal costs, retention bonus and amortization expenses of $8.4 million. This is compared to total operating costs and expenses for the first quarter of 2011 of $54.2 million, which included general litigation expenses of $9.2 million and the gain from settlement of $6.2 million. Total operating costs and expenses in the second quarter of 2010 were $45.5 million, which included general litigation expenses of $5.2 million and the gain from settlement of $10.3 million.

Total operating costs and expenses for the six months ended June 30, 2011 were $122.9 million, which included a $6.2 million gain related to the Samsung settlement, $14.3 million of stock-based compensation expenses and $1.9 million for previous stock-based compensation restatement and related legal expenses. This is compared to total operating costs and expenses of $5.2 million, which included a $106.2 million gain related to the Samsung settlement, $15.8 million of stock-based compensation expenses and $2.2 million for previous stock-based compensation restatement and related legal expenses for the same period of 2010. General litigation expenses for the six months ended June 30, 2011 were $20.7 million, an increase of $8.5 million from the same period in 2010.

Net loss for the second quarter of 2011 was $10.6 million as compared to a net loss of $4.2 million in the first quarter of 2011 and a net loss of $12.5 million in the second quarter of 2010. Diluted net loss per share for the second quarter of 2011 was $0.10 as compared to a net loss per share of $0.04 in the first quarter of 2011 and a net loss per share of $0.11 in the second quarter of 2010.

Net loss for the six months ended June 30, 2011 was $14.8 million as compared to a net income of $138.4 million for the same period of 2010. Diluted net loss per share for the six months ended June 30, 2011 was $0.14 as compared to a net income per share of $1.18 for the same period of 2010.

Non-GAAP Financial Results (1):

Customer licensing income in the second quarter of 2011 was $73.0 million as compared to $68.7 million in the first quarter of 2011 and $49.2 million in the second quarter of 2010. Customer licensing income for the six months ended June 30, 2011 was $141.7 million as compared to $306.9 million in the same period of 2010.

Non-GAAP operating costs and expenses in the second quarter of 2011 were $50.6 million as compared to $49.9 million in the first quarter of 2011 and $45.1 million in the second quarter of 2010. Non-GAAP operating costs and expenses for the six months ended June 30, 2011were $100.5 million as compared to $91.2 million in the same period of 2010.

Non-GAAP operating income in the second quarter of 2011 was $22.3 million as compared to $18.8 million in the first quarter of 2011 and $4.1 million in the second quarter of 2010. Non-GAAP operating income for the six months ended June 30, 2011 was $41.1 million as compared to $215.7 million in the same period of 2010.

Non-GAAP net income in the second quarter of 2011 was $12.4 million as compared to $10.2 million in the first quarter of 2011 and $1.4 million in the second quarter of 2010. Non-GAAP net income for the six months ended June 30, 2011 was $22.6 million as compared to $135.8 million in the same period of 2010.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of June 30, 2011 were $359.4 million, a decrease of approximately $149.2 million from March 31, 2011. The decrease was primarily due to $168.8 million of cash used in the acquisition of Cryptography Research, Inc. offset by cash provided from operations.

On July 20, 2011, the Company received notice from Samsung exercising their right to put back approximately 4.8 million shares of the Company’s common stock for an aggregate amount of $100.0 million, in accordance with the terms of the Stock Purchase Agreement with Samsung dated January 19, 2010.

During the quarter ended June 30, 2011, the Company recorded an income tax provision of approximately $2.1 million. As the Company continues to maintain a valuation allowance against its U.S. deferred tax assets, the Company’s tax provision consists of primarily state, foreign and withholding taxes.

The company will host a conference call today at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at http://investor.rambus.com/events.cfm. A replay will be available following the call on Rambus' Investor Relations website or for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID# 83829526.

Financial Tables

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About Rambus Inc.:

Rambus is one of the world’s premier technology licensing companies. As a company of inventors, Rambus focuses on the development of technologies that enrich the end-user experience of electronic systems. Additional information is available at www.rambus.com.