Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Rambus Reports Second Quarter 2022 Financial Results By: Rambus Inc. via Business Wire August 01, 2022 at 16:05 PM EDT Delivered Q2 revenue and earnings at the high end of guidance Achieved record quarterly product revenue driven by memory interface chips Expanded DDR5 portfolio with introduction of companion chips for server and client memory modules Generated $56.5 million in cash from operations 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). 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# 092440. Non-GAAP Financial Information In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: cost of product revenue, operating expenses and interest and other income (expense), net. In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expense, acquisition-related costs and retention bonus expense, amortization of acquired intangible assets, expense on abandoned operating leases, change in fair value of earn-out liability, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. A reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release. The Company’s non-GAAP financial measures reflect adjustments based on the following items: Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies. Acquisition-related costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current period’s portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and have no direct correlation to the Company’s operations. Amortization of acquired intangible assets. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business. Expense on abandoned operating leases. Reflects the expense on building leases that were abandoned. The Company excludes these charges because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses. Change in fair value of earn-out liability. This change is due to adjustments to acquisition purchase consideration. The Company excludes these adjustments because such adjustments are not directly related to ongoing business results and do not reflect expected future operating expenses. Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations. Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 24 percent for both 2022 and 2021, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied these tax rates to its non-GAAP financial results for all periods in the relevant years to assist the Company’s planning. On occasion in the future, there may be other items, such as significant gains or losses from contingencies, that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management. About Rambus Inc. Rambus is a provider of industry-leading chips and silicon IP making data faster and safer. With over 30 years of advanced semiconductor experience, we are a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences. For more information, visit rambus.com. Forward-Looking Statements This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including those relating to Rambus’ expectations regarding business opportunities, the Company’s ability to deliver long-term, profitable growth, product and investment strategies, and the Company’s outlook and financial guidance for the third quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission, as well as the potential adverse impacts related to, or arising from, the COVID-19 and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. Rambus Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) June 30, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 171,460 $ 107,891 Marketable securities 180,175 377,718 Accounts receivable 63,602 44,065 Unbilled receivables 146,692 135,608 Inventories 9,238 8,482 Prepaids and other current assets 9,979 10,600 Total current assets 581,146 684,364 Intangible assets, net 58,866 58,420 Goodwill 291,995 278,810 Property, plant and equipment, net 81,735 56,035 Operating lease right-of-use assets 26,343 23,712 Deferred tax assets 2,686 4,047 Unbilled receivables 65,211 123,018 Other assets 2,931 4,240 Total assets $ 1,110,913 $ 1,232,646 LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 20,183 $ 11,279 Accrued salaries and benefits 20,689 20,945 Convertible notes 49,248 163,687 Deferred revenue 22,165 24,755 Income taxes payable 20,846 20,607 Operating lease liabilities 5,873 5,992 Other current liabilities 22,440 20,002 Total current liabilities 161,444 267,267 Long-term liabilities: Long-term operating lease liabilities 31,219 29,099 Long-term income taxes payable 12,220 21,424 Deferred tax liabilities 25,159 23,985 Other long-term liabilities 42,713 28,475 Total long-term liabilities 111,311 102,983 Total stockholders’ equity 838,158 862,396 Total liabilities and stockholders’ equity $ 1,110,913 $ 1,232,646 Rambus Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2022 2021 2022 2021 Revenue: Product revenue $ 53,302 $ 31,170 $ 101,271 $ 61,951 Royalties 48,038 41,910 78,502 70,769 Contract and other revenue 19,792 11,779 40,409 22,521 Total revenue 121,132 84,859 220,182 155,241 Cost of revenue: Cost of product revenue 20,417 11,422 38,814 22,832 Cost of contract and other revenue 974 1,017 1,598 2,573 Amortization of acquired intangible assets 3,421 4,439 6,799 8,825 Total cost of revenue 24,812 16,878 47,211 34,230 Gross profit 96,320 67,981 172,971 121,011 Operating expenses: Research and development 39,538 31,469 79,353 63,823 Sales, general and administrative 26,305 22,184 53,211 45,746 Amortization of acquired intangible assets 417 229 826 458 Restructuring charges — — — 368 Change in fair value of earn-out liability (5,500 ) — (4,300 ) — Total operating expenses 60,760 53,882 129,090 110,395 Operating income 35,560 14,099 43,881 10,616 Interest income and other income (expense), net 2,738 2,381 4,098 5,362 Loss on extinguishment of debt — — (66,497 ) — Loss on fair value adjustment of derivatives, net — — (8,283 ) — Interest expense (348 ) (2,683 ) (953 ) (5,297 ) Interest and other income (expense), net 2,390 (302 ) (71,635 ) 65 Income (loss) before income taxes 37,950 13,797 (27,754 ) 10,681 Provision for income taxes 2,930 2,631 3,444 2,128 Net income (loss) $ 35,020 $ 11,166 $ (31,198 ) $ 8,553 Net income (loss) per share: Basic $ 0.32 $ 0.10 $ (0.28 ) $ 0.08 Diluted $ 0.31 $ 0.10 $ (0.28 ) $ 0.07 Weighted average shares used in per share calculation Basic 110,447 112,144 110,170 112,177 Diluted 112,715 114,931 110,170 115,358 Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (Unaudited) Three Months Ended June 30, (In thousands) 2022 2021 Cost of product revenue $ 20,417 $ 11,422 Adjustment: Stock-based compensation expense (132 ) (70 ) Non-GAAP cost of product revenue $ 20,285 $ 11,352 Total operating expenses $ 60,760 $ 53,882 Adjustments: Stock-based compensation expense (8,504 ) (7,228 ) Acquisition-related costs and retention bonus expense (1,949 ) (2,200 ) Amortization of acquired intangible assets (417 ) (229 ) Expense on abandoned operating leases (531 ) (521 ) Change in fair value of earn-out liability 5,500 — Non-GAAP total operating expenses $ 54,859 $ 43,704 Interest and other income (expense), net $ 2,390 $ (302 ) Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1,455 ) (2,382 ) Non-cash interest expense on convertible notes 45 1,901 Non-GAAP interest and other income (expense), net $ 980 $ (783 ) Rambus Inc. Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (Unaudited) 2022 Third Quarter Outlook Three Months Ended September 30, 2022 (In millions) Low High Forward-looking operating costs and expenses $ 94.0 $ 90.0 Adjustments: Stock-based compensation expense (9.0 ) (9.0 ) Amortization of acquired intangible assets (4.0 ) (4.0 ) Forward-looking Non-GAAP operating costs and expenses $ 81.0 $ 77.0 Forward-looking interest and other income (expense), net $ 0.1 $ 0.1 Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1.2 ) (1.2 ) Non-cash interest expense on convertible notes 0.1 0.1 Forward-looking Non-GAAP interest and other income (expense), net $ (1.0 ) $ (1.0 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005666/en/Contacts Nicole Noutsios Rambus Investor Relations (510) 315-1003 rambus@nmnadvisors.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Rambus Reports Second Quarter 2022 Financial Results By: Rambus Inc. via Business Wire August 01, 2022 at 16:05 PM EDT Delivered Q2 revenue and earnings at the high end of guidance Achieved record quarterly product revenue driven by memory interface chips Expanded DDR5 portfolio with introduction of companion chips for server and client memory modules Generated $56.5 million in cash from operations 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). 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# 092440. Non-GAAP Financial Information In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: cost of product revenue, operating expenses and interest and other income (expense), net. In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expense, acquisition-related costs and retention bonus expense, amortization of acquired intangible assets, expense on abandoned operating leases, change in fair value of earn-out liability, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. A reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release. The Company’s non-GAAP financial measures reflect adjustments based on the following items: Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies. Acquisition-related costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current period’s portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and have no direct correlation to the Company’s operations. Amortization of acquired intangible assets. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business. Expense on abandoned operating leases. Reflects the expense on building leases that were abandoned. The Company excludes these charges because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses. Change in fair value of earn-out liability. This change is due to adjustments to acquisition purchase consideration. The Company excludes these adjustments because such adjustments are not directly related to ongoing business results and do not reflect expected future operating expenses. Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations. Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 24 percent for both 2022 and 2021, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied these tax rates to its non-GAAP financial results for all periods in the relevant years to assist the Company’s planning. On occasion in the future, there may be other items, such as significant gains or losses from contingencies, that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management. About Rambus Inc. Rambus is a provider of industry-leading chips and silicon IP making data faster and safer. With over 30 years of advanced semiconductor experience, we are a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences. For more information, visit rambus.com. Forward-Looking Statements This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including those relating to Rambus’ expectations regarding business opportunities, the Company’s ability to deliver long-term, profitable growth, product and investment strategies, and the Company’s outlook and financial guidance for the third quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission, as well as the potential adverse impacts related to, or arising from, the COVID-19 and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. Rambus Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) June 30, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 171,460 $ 107,891 Marketable securities 180,175 377,718 Accounts receivable 63,602 44,065 Unbilled receivables 146,692 135,608 Inventories 9,238 8,482 Prepaids and other current assets 9,979 10,600 Total current assets 581,146 684,364 Intangible assets, net 58,866 58,420 Goodwill 291,995 278,810 Property, plant and equipment, net 81,735 56,035 Operating lease right-of-use assets 26,343 23,712 Deferred tax assets 2,686 4,047 Unbilled receivables 65,211 123,018 Other assets 2,931 4,240 Total assets $ 1,110,913 $ 1,232,646 LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 20,183 $ 11,279 Accrued salaries and benefits 20,689 20,945 Convertible notes 49,248 163,687 Deferred revenue 22,165 24,755 Income taxes payable 20,846 20,607 Operating lease liabilities 5,873 5,992 Other current liabilities 22,440 20,002 Total current liabilities 161,444 267,267 Long-term liabilities: Long-term operating lease liabilities 31,219 29,099 Long-term income taxes payable 12,220 21,424 Deferred tax liabilities 25,159 23,985 Other long-term liabilities 42,713 28,475 Total long-term liabilities 111,311 102,983 Total stockholders’ equity 838,158 862,396 Total liabilities and stockholders’ equity $ 1,110,913 $ 1,232,646 Rambus Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2022 2021 2022 2021 Revenue: Product revenue $ 53,302 $ 31,170 $ 101,271 $ 61,951 Royalties 48,038 41,910 78,502 70,769 Contract and other revenue 19,792 11,779 40,409 22,521 Total revenue 121,132 84,859 220,182 155,241 Cost of revenue: Cost of product revenue 20,417 11,422 38,814 22,832 Cost of contract and other revenue 974 1,017 1,598 2,573 Amortization of acquired intangible assets 3,421 4,439 6,799 8,825 Total cost of revenue 24,812 16,878 47,211 34,230 Gross profit 96,320 67,981 172,971 121,011 Operating expenses: Research and development 39,538 31,469 79,353 63,823 Sales, general and administrative 26,305 22,184 53,211 45,746 Amortization of acquired intangible assets 417 229 826 458 Restructuring charges — — — 368 Change in fair value of earn-out liability (5,500 ) — (4,300 ) — Total operating expenses 60,760 53,882 129,090 110,395 Operating income 35,560 14,099 43,881 10,616 Interest income and other income (expense), net 2,738 2,381 4,098 5,362 Loss on extinguishment of debt — — (66,497 ) — Loss on fair value adjustment of derivatives, net — — (8,283 ) — Interest expense (348 ) (2,683 ) (953 ) (5,297 ) Interest and other income (expense), net 2,390 (302 ) (71,635 ) 65 Income (loss) before income taxes 37,950 13,797 (27,754 ) 10,681 Provision for income taxes 2,930 2,631 3,444 2,128 Net income (loss) $ 35,020 $ 11,166 $ (31,198 ) $ 8,553 Net income (loss) per share: Basic $ 0.32 $ 0.10 $ (0.28 ) $ 0.08 Diluted $ 0.31 $ 0.10 $ (0.28 ) $ 0.07 Weighted average shares used in per share calculation Basic 110,447 112,144 110,170 112,177 Diluted 112,715 114,931 110,170 115,358 Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (Unaudited) Three Months Ended June 30, (In thousands) 2022 2021 Cost of product revenue $ 20,417 $ 11,422 Adjustment: Stock-based compensation expense (132 ) (70 ) Non-GAAP cost of product revenue $ 20,285 $ 11,352 Total operating expenses $ 60,760 $ 53,882 Adjustments: Stock-based compensation expense (8,504 ) (7,228 ) Acquisition-related costs and retention bonus expense (1,949 ) (2,200 ) Amortization of acquired intangible assets (417 ) (229 ) Expense on abandoned operating leases (531 ) (521 ) Change in fair value of earn-out liability 5,500 — Non-GAAP total operating expenses $ 54,859 $ 43,704 Interest and other income (expense), net $ 2,390 $ (302 ) Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1,455 ) (2,382 ) Non-cash interest expense on convertible notes 45 1,901 Non-GAAP interest and other income (expense), net $ 980 $ (783 ) Rambus Inc. Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (Unaudited) 2022 Third Quarter Outlook Three Months Ended September 30, 2022 (In millions) Low High Forward-looking operating costs and expenses $ 94.0 $ 90.0 Adjustments: Stock-based compensation expense (9.0 ) (9.0 ) Amortization of acquired intangible assets (4.0 ) (4.0 ) Forward-looking Non-GAAP operating costs and expenses $ 81.0 $ 77.0 Forward-looking interest and other income (expense), net $ 0.1 $ 0.1 Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1.2 ) (1.2 ) Non-cash interest expense on convertible notes 0.1 0.1 Forward-looking Non-GAAP interest and other income (expense), net $ (1.0 ) $ (1.0 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005666/en/Contacts Nicole Noutsios Rambus Investor Relations (510) 315-1003 rambus@nmnadvisors.com
Delivered Q2 revenue and earnings at the high end of guidance Achieved record quarterly product revenue driven by memory interface chips Expanded DDR5 portfolio with introduction of companion chips for server and client memory modules Generated $56.5 million in cash from operations
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). 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# 092440. Non-GAAP Financial Information In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: cost of product revenue, operating expenses and interest and other income (expense), net. In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expense, acquisition-related costs and retention bonus expense, amortization of acquired intangible assets, expense on abandoned operating leases, change in fair value of earn-out liability, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. A reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release. The Company’s non-GAAP financial measures reflect adjustments based on the following items: Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies. Acquisition-related costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current period’s portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and have no direct correlation to the Company’s operations. Amortization of acquired intangible assets. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business. Expense on abandoned operating leases. Reflects the expense on building leases that were abandoned. The Company excludes these charges because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses. Change in fair value of earn-out liability. This change is due to adjustments to acquisition purchase consideration. The Company excludes these adjustments because such adjustments are not directly related to ongoing business results and do not reflect expected future operating expenses. Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations. Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 24 percent for both 2022 and 2021, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied these tax rates to its non-GAAP financial results for all periods in the relevant years to assist the Company’s planning. On occasion in the future, there may be other items, such as significant gains or losses from contingencies, that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management. About Rambus Inc. Rambus is a provider of industry-leading chips and silicon IP making data faster and safer. With over 30 years of advanced semiconductor experience, we are a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences. For more information, visit rambus.com. Forward-Looking Statements This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including those relating to Rambus’ expectations regarding business opportunities, the Company’s ability to deliver long-term, profitable growth, product and investment strategies, and the Company’s outlook and financial guidance for the third quarter of 2022 and related drivers, and the Company’s ability to effectively manage supply chain shortages. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by the Company’s management. Actual results may differ materially. The Company’s business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission, as well as the potential adverse impacts related to, or arising from, the COVID-19 and its variants. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. Rambus Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) June 30, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 171,460 $ 107,891 Marketable securities 180,175 377,718 Accounts receivable 63,602 44,065 Unbilled receivables 146,692 135,608 Inventories 9,238 8,482 Prepaids and other current assets 9,979 10,600 Total current assets 581,146 684,364 Intangible assets, net 58,866 58,420 Goodwill 291,995 278,810 Property, plant and equipment, net 81,735 56,035 Operating lease right-of-use assets 26,343 23,712 Deferred tax assets 2,686 4,047 Unbilled receivables 65,211 123,018 Other assets 2,931 4,240 Total assets $ 1,110,913 $ 1,232,646 LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 20,183 $ 11,279 Accrued salaries and benefits 20,689 20,945 Convertible notes 49,248 163,687 Deferred revenue 22,165 24,755 Income taxes payable 20,846 20,607 Operating lease liabilities 5,873 5,992 Other current liabilities 22,440 20,002 Total current liabilities 161,444 267,267 Long-term liabilities: Long-term operating lease liabilities 31,219 29,099 Long-term income taxes payable 12,220 21,424 Deferred tax liabilities 25,159 23,985 Other long-term liabilities 42,713 28,475 Total long-term liabilities 111,311 102,983 Total stockholders’ equity 838,158 862,396 Total liabilities and stockholders’ equity $ 1,110,913 $ 1,232,646 Rambus Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2022 2021 2022 2021 Revenue: Product revenue $ 53,302 $ 31,170 $ 101,271 $ 61,951 Royalties 48,038 41,910 78,502 70,769 Contract and other revenue 19,792 11,779 40,409 22,521 Total revenue 121,132 84,859 220,182 155,241 Cost of revenue: Cost of product revenue 20,417 11,422 38,814 22,832 Cost of contract and other revenue 974 1,017 1,598 2,573 Amortization of acquired intangible assets 3,421 4,439 6,799 8,825 Total cost of revenue 24,812 16,878 47,211 34,230 Gross profit 96,320 67,981 172,971 121,011 Operating expenses: Research and development 39,538 31,469 79,353 63,823 Sales, general and administrative 26,305 22,184 53,211 45,746 Amortization of acquired intangible assets 417 229 826 458 Restructuring charges — — — 368 Change in fair value of earn-out liability (5,500 ) — (4,300 ) — Total operating expenses 60,760 53,882 129,090 110,395 Operating income 35,560 14,099 43,881 10,616 Interest income and other income (expense), net 2,738 2,381 4,098 5,362 Loss on extinguishment of debt — — (66,497 ) — Loss on fair value adjustment of derivatives, net — — (8,283 ) — Interest expense (348 ) (2,683 ) (953 ) (5,297 ) Interest and other income (expense), net 2,390 (302 ) (71,635 ) 65 Income (loss) before income taxes 37,950 13,797 (27,754 ) 10,681 Provision for income taxes 2,930 2,631 3,444 2,128 Net income (loss) $ 35,020 $ 11,166 $ (31,198 ) $ 8,553 Net income (loss) per share: Basic $ 0.32 $ 0.10 $ (0.28 ) $ 0.08 Diluted $ 0.31 $ 0.10 $ (0.28 ) $ 0.07 Weighted average shares used in per share calculation Basic 110,447 112,144 110,170 112,177 Diluted 112,715 114,931 110,170 115,358 Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (Unaudited) Three Months Ended June 30, (In thousands) 2022 2021 Cost of product revenue $ 20,417 $ 11,422 Adjustment: Stock-based compensation expense (132 ) (70 ) Non-GAAP cost of product revenue $ 20,285 $ 11,352 Total operating expenses $ 60,760 $ 53,882 Adjustments: Stock-based compensation expense (8,504 ) (7,228 ) Acquisition-related costs and retention bonus expense (1,949 ) (2,200 ) Amortization of acquired intangible assets (417 ) (229 ) Expense on abandoned operating leases (531 ) (521 ) Change in fair value of earn-out liability 5,500 — Non-GAAP total operating expenses $ 54,859 $ 43,704 Interest and other income (expense), net $ 2,390 $ (302 ) Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1,455 ) (2,382 ) Non-cash interest expense on convertible notes 45 1,901 Non-GAAP interest and other income (expense), net $ 980 $ (783 ) Rambus Inc. Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (Unaudited) 2022 Third Quarter Outlook Three Months Ended September 30, 2022 (In millions) Low High Forward-looking operating costs and expenses $ 94.0 $ 90.0 Adjustments: Stock-based compensation expense (9.0 ) (9.0 ) Amortization of acquired intangible assets (4.0 ) (4.0 ) Forward-looking Non-GAAP operating costs and expenses $ 81.0 $ 77.0 Forward-looking interest and other income (expense), net $ 0.1 $ 0.1 Adjustments: Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements (1.2 ) (1.2 ) Non-cash interest expense on convertible notes 0.1 0.1 Forward-looking Non-GAAP interest and other income (expense), net $ (1.0 ) $ (1.0 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005666/en/