Advanced Computing in the Age of AI|Wednesday, September 30, 2020
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Rambus Reports Second Quarter 2020 Financial Results 

SAN JOSE, Calif.Aug. 4, 2020 -- Rambus Inc. reported financial results for the second quarter ended June 30, 2020. GAAP revenue for the second quarter was $59.9 million; licensing billings were $60.7 million, product revenue was $31.7 million, and contract and other revenue was $11.2 million. The Company also generated $62.0 million in cash provided by operating activities.

"Rambus had a superb second quarter with cash generated from operations at a 10-year high and our chip business delivering its fifth consecutive quarter of record revenue," said Luc Seraphin, chief executive officer of Rambus. "This tremendous performance was enabled by our sustained focus on quality and execution, demonstrating our ability to consistently deliver."

Business Review

The need for increased bandwidth, capacity and security across all data-centric applications continues to create strong sustained demand for products and solutions that improve the performance of the global data infrastructure and drive Rambus growth.

The Company's memory interface chip business continued its growth trajectory, with a fifth consecutive quarter of record revenue. This performance was driven by a combination of increased data center and OEM qualifications, and an overall increase in market demand. With the recent industry publication of the DDR5 memory specification, Rambus remains poised as a market leader to support our customers' next-generation systems.

The Rambus Silicon IP business maintained its momentum with design wins for interface and security IP at tier-1 SoC makers across data center, AI and 5G. With the availability of the cutting-edge 112G XSR SerDes for chiplets and co-packaged optics, the Company continues to deliver solutions that enable leading-edge architectures and capabilities for high-performance systems.

Quarterly Financial Review - GAAP

Three Months Ended
June 30,

(In millions, except for percentages and per share amounts)

2020

2019

Revenue

Royalties

$

17.0

$

27.1

Product revenue

31.7

16.0

Contract and other revenue

11.2

15.2

 Total revenue

$

59.9

$

58.3

Cost of product revenue

$

10.3

$

6.3

Cost of contract and other revenue

$

1.5

$

2.9

Amortization of acquired intangible assets (included in total cost of revenue)

$

4.3

$

3.8

Total operating expenses (1)

$

56.2

$

82.3

Operating loss

$

(12.5)

$

(37.0)

Operating margin

(21)

%

64

%

Net loss

$

(10.8)

$

(37.0)

Diluted net loss per share

$

(0.09)

$

(0.33)

Net cash provided by operating activities

$

62.0

$

38.7

(1)

Includes amortization of acquired intangible assets of approximately $0.2 million and $1.1 million for the three months ended June 30, 2020 and 2019, respectively.

Quarterly Financial Review - Non-GAAP (including operational metric) (1)

Three Months Ended
June 30,

(In millions)

2020

2019

Licensing billings (2)

$

60.7

$

64.9

Product revenue

$

31.7

$

16.0

Contract and other revenue

$

11.2

$

15.2

Cost of product revenue

$

10.3

$

6.3

Cost of contract and other revenue

$

1.5

$

2.9

Total operating expenses

$

47.7

$

54.9

Interest and other income (expense), net

$

0.1

$

0.9

Diluted share count

115

113

(1)

See "Supplemental Reconciliation of GAAP to Non-GAAP Results" table included below. Note that the applicable non-GAAP measures are presented and that revenue, cost of product revenue and cost of contract and other revenue are solely presented on a GAAP basis.

(2)

Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences.

GAAP revenue for the quarter was $59.9 million, at the high end of expectations due to the Company's strong performance in its memory interface chip business. The Company also had licensing billings of $60.7 million, product revenue of $31.7 million, and contract and other revenue of $11.2 million. Rambus had total GAAP cost of revenue of $16.1 million and operating expenses of $56.2 million. The Company also had total non-GAAP operating expenses of $59.5 million (which includes non-GAAP cost of revenue), below the low end of its expectations through its cost management actions. Due to the Company's strong performance and cost management actions, its revenue and profit were at the high end of its expectations. The Company had GAAP diluted net loss per share of $0.09. The Company's basic share count was 114 million shares and its diluted share count would have been 115 million shares.

Cash, cash equivalents, and marketable securities as of June 30, 2020 were $486.1 million, an increase of $50.7 million from March 31, 2020, mainly due to $62.0 million in cash provided by operating activities, the highest quarterly cash generation in over 10 years.

2020 Third Quarter Outlook

The Company will discuss its full revenue guidance for the third quarter of 2020 during its upcoming conference call. The following table sets forth third quarter outlook for other measures.

(In millions)

GAAP

Non-GAAP (1)

Licensing billings (2)

$55 - $61

$55 - $61

Product revenue

$29 - $35

$29 - $35

Contract and other revenue

$10 - $16

$10 - $16

Total operating costs and expenses

$76 - $72

$64 - $60

Interest and other income (expense), net

$2

$0

Diluted share count

116

116

(1)

See "Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates" table included below. Note that the applicable non-GAAP measures are presented, and that revenue is solely presented on a GAAP basis.

(2)

Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences. This metric is the same for both GAAP and non-GAAP presentations.

For the third quarter of 2020, the Company expects licensing billings to be between $55 million and $61 million. The Company also expects royalty revenue to be between $9 million and $15 million, product revenue to be between $29 million and $35 million and contract and other revenue to be between $10 million and $16 million. Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for various product sales, solutions licensing among other matters.

The Company also expects operating costs and expenses to be between $76 million and $72 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $64 million and $60 million. These expectations also assume non-GAAP interest and other income (expense), net, of $0 million, tax rate of 24% and diluted share count of 116 million, and exclude stock-based compensation expense ($7 million), amortization expense ($5 million), non-cash interest expense on convertible notes ($2 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($3 million).

For additional graphics, visit https://investor.rambus.com/press-releases/press-release-details/2020/Rambus-Reports-Second-Quarter-2020-Financial-Results/default.aspx

About Rambus Inc.

Rambus is a premier Silicon IP and chip provider that makes data faster and safer. With 30 years of innovation, we continue to develop the foundational technology for all modern computing systems. Leveraging our semiconductor expertise, Rambus solutions speed performance, expand capacity and improve security for today's most demanding applications. From data center and edge to artificial intelligence and automotive, our interface and security IP, and memory interface chips enable SoC and system designers to deliver their vision of the future. For more information, visit rambus.com.


Source: Rambus 

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