- 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/
Nicole Noutsios Rambus Investor Relations (510) 315-1003
rambus@nmnadvisors.com
Rambus (NASDAQ:RMBS)
Historical Stock Chart
From Apr 2024 to May 2024
Rambus (NASDAQ:RMBS)
Historical Stock Chart
From May 2023 to May 2024