Delivered record quarterly product revenue of $73.4 million, up 11% sequentially and 37% year over year
Generated record annual cash from operations of $230.6 million for 2024, up 18% year over year
Extended patent license agreement with Micron through 2029

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, 2024. GAAP revenue for the fourth quarter was $161.1 million; licensing billings were $63.6 million, product revenue was $73.4 million, and contract and other revenue was $29.5 million. The Company also generated $59.0 million in cash provided by operating activities in the fourth quarter.

"We finished 2024 strongly with sequential and year-over-year growth, delivering record annual product revenue and cash from operations," said Luc Seraphin, chief executive officer of Rambus. "We expanded our addressable market with a record number of new product introductions throughout the year and gained share through continued product leadership. As AI continues to accelerate performance demands across the computing landscape, we are well positioned to deliver long-term growth and continued stockholder return."

Quarterly Financial Review - GAAP	Three Months Ended December 31,
(In millions, except for percentages and per share amounts)	2024			2023
Revenue
Product revenue	$	73.4		$	53.7
Royalties		58.2			52.4
Contract and other revenue		29.5			16.1
Total revenue		161.1			122.2
Cost of product revenue		28.5			19.9
Cost of contract and other revenue		0.7			1.1
Amortization of acquired intangible assets (included in total cost of revenue)		2.3			3.1
Total operating expenses ⁽¹⁾		71.7			63.0
Operating income	$	57.9		$	35.1
Operating margin		36	%		29	%
Net income	$	62.2		$	58.5
Diluted net income per share	$	0.58		$	0.53

Net cash provided by operating activities	$	59.0		$	54.8

____________________________

⁽¹⁾

Includes amortization of acquired intangibles of approximately $0.2 million for the three months ended December 31, 2023. Amortization of acquired intangibles was immaterial for the three months ended December 31, 2024.

Quarterly Financial Review - Supplemental Information⁽¹⁾	Three Months Ended December 31,
(In millions)	2024		2023
Licensing billings (operational metric)⁽²⁾	$	63.6	$	66.2
Product revenue (GAAP)	$	73.4	$	53.7
Contract and other revenue (GAAP)	$	29.5	$	16.1
Non-GAAP cost of product revenue	$	28.3	$	19.8
Cost of contract and other revenue (GAAP)	$	0.7	$	1.1
Non-GAAP total operating expenses	$	60.1	$	51.0
Non-GAAP interest and other income (expense), net	$	4.4	$	3.8
Diluted share count (GAAP)		108		110

____________________________

⁽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 $161.1 million. The Company also had licensing billings of $63.6 million, product revenue of $73.4 million, and contract and other revenue of $29.5 million. The Company had total GAAP cost of revenue of $31.5 million and operating expenses of $71.7 million. The Company also had total non-GAAP operating expenses of $89.1 million (including non-GAAP cost of revenue of $29 million). The Company had GAAP diluted net income per share of $0.58. The Company's basic share count was 107 million shares and its diluted share count was 108 million shares.

Cash, cash equivalents, and marketable securities as of December 31, 2024 were $481.8 million, an increase of $49.1 million as compared to September 30, 2024, mainly due to cash provided by operating activities of approximately $59 million. Cash provided by operating activities for the year ended December 31, 2024 was $230.6 million.

2025 First Quarter Outlook

The Company will discuss its full revenue guidance for the first quarter of 2025 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	$72 - $78	$72 - $78
Contract and other revenue	$22 - $28	$22 - $28
Total operating costs and expenses	$105 - $101	$91- $87
Interest and other income (expense), net	$4	$4
Diluted share count	108	108

____________________________

⁽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 first quarter of 2025, the Company expects licensing billings to be between $59 million and $65 million. The Company also expects royalty revenue to be between $56 million and $62 million, product revenue to be between $72 million and $78 million and contract and other revenue to be between $22 million and $28 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 $105 million and $101 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $91 million and $87 million. These expectations also assume a tax rate of 20% and diluted share count of 108 million, and exclude stock-based compensation expense of $12 million and amortization of acquired intangible assets of $2 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 will be 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 (+1) 929-458-6194 (international) with ID# 691793.

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/divestiture-related costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges (recoveries), (gain) loss on divestiture, expense on abandoned operating leases, change in fair value of earn-out liability, gain on sale of non-marketable equity security, 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/divestiture-related costs and retention bonus expense. These expenses include all direct costs of certain acquisitions, divestitures and the current periods' 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 divestitures 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.

Restructuring and other charges (recoveries). These charges (recoveries) may consist of severance, contractual retention payments, exit costs and other charges and are excluded because such charges (recoveries) are not directly related to ongoing business results and do not reflect expected future operating expenses.

(Gain) loss on divestiture. Reflects the (gain) loss on the sale of the Company's PHY IP business. The Company excludes these charges (benefits) because such charges (benefits) are not directly related to ongoing business results and do not reflect expected future operating expenses (benefits).

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.

Gain on sale of non-marketable equity security. The Company has excluded gain on sale of non-marketable equity security as this is not a reflection of 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 22 percent and 24 percent for 2024 and 2023, respectively, 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 global semiconductor company dedicated to enabling the future of the data center and artificial intelligence ("AI") by delivering innovative memory and security solutions that address the evolving needs of the industry. As a pioneer with approximately 35 years of advanced semiconductor design experience, Rambus is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of accelerating and securing data movement in the data center, edge, and client markets. Rambus is a leader in high-performance memory subsystems, offering a balanced and diverse portfolio of products encompassing chips and silicon intellectual property (IP). Focusing primarily on the data center, our innovative solutions maximize performance and security in computationally intensive systems. 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 first quarter of 2025 and related drivers, and the Company's ability to effectively manage market challenges. 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. 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)	December 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	99,775	$	94,767
Marketable securities		382,023		331,077
Accounts receivable		122,813		82,925
Unbilled receivables		25,070		50,872
Inventories		44,634		36,154
Prepaids and other current assets		15,942		34,850
Total current assets		690,257		630,645
Intangible assets, net		17,059		28,769
Goodwill		286,812		286,812
Property, plant and equipment, net		75,509		67,808
Operating lease right-of-use assets		21,454		21,497
Deferred tax assets		136,466		127,892
Income taxes receivable		109,947		88,768
Other assets		5,632		6,036
Total assets	$	1,343,136	$	1,258,227

LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	18,522	$	18,074
Accrued salaries and benefits		19,193		17,504
Deferred revenue		19,903		17,393
Income taxes payable		1,264		5,099
Operating lease liabilities		5,617		4,453
Other current liabilities		17,313		26,598
Total current liabilities		81,812		89,121
Long-term operating lease liabilities		24,534		26,255
Long-term income taxes payable		109,383		78,947
Other long-term liabilities		6,715		25,803
Total long-term liabilities		140,632		131,005
Total stockholders' equity		1,120,692		1,038,101
Total liabilities and stockholders' equity	$	1,343,136	$	1,258,227

Rambus Inc. Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
(In thousands, except per share amounts)	2024			2023			2024			2023
Revenue:
Product revenue	$	73,369		$	53,698		$	246,815		$	224,632
Royalties		58,211			52,412			226,172			150,110
Contract and other revenue		29,522			16,115			83,637			86,375
Total revenue		161,102			122,225			556,624			461,117
Cost of revenue:
Cost of product revenue		28,494			19,941			95,875			84,495
Cost of contract and other revenue		721			1,123			3,028			5,403
Amortization of acquired intangible assets		2,300			3,052			11,204			13,524
Total cost of revenue		31,515			24,116			110,107			103,422
Gross profit		129,587			98,109			446,517			357,695
Operating expenses:
Research and development		43,698			35,985			162,881			156,827
Sales, general and administrative		27,998			25,665			104,094			108,149
Amortization of acquired intangible assets		30			195			506			1,217
Restructuring and other charges (recoveries)		—			(26	)		—			9,368
(Gain) loss on divestiture		—			59			—			(90,784	)
Impairment of assets		—			—			1,071			10,045
Change in fair value of earn-out liability		—			1,100			(5,044	)		9,234
Total operating expenses		71,726			62,978			263,508			204,056
Operating income		57,861			35,131			183,009			153,639
Interest income and other income (expense), net		4,796			4,215			18,450			11,327
Loss on fair value adjustment of derivatives, net		—			—			—			(240	)
Gain on sale of non-marketable equity security		—			23,924			—			23,924
Interest expense		(352	)		(377	)		(1,416	)		(1,490	)
Interest and other income (expense), net		4,444			27,762			17,034			33,521
Income before income taxes		62,305			62,893			200,043			187,160
Provision for (benefit from) income taxes		103			4,348			20,222			(146,744	)
Net income	$	62,202		$	58,545		$	179,821		$	333,904
Net income per share:
Basic	$	0.58		$	0.54		$	1.67		$	3.09
Diluted	$	0.58		$	0.53		$	1.65		$	3.01
Weighted average shares used in per share calculation:
Basic		106,716			107,703			107,438			108,183
Diluted		108,082			110,065			109,041			110,889

Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (Unaudited)

	Three Months Ended
	December 31,
(In thousands)	2024			2023
Cost of product revenue	$	28,494		$	19,941
Adjustment:
Stock-based compensation expense		(172	)		(145	)
Non-GAAP cost of product revenue	$	28,322		$	19,796

Total operating expenses	$	71,726		$	62,978
Adjustments:
Stock-based compensation expense		(11,563	)		(10,389	)
Acquisition/divestiture-related costs and retention bonus expense		(22	)		(285	)
Amortization of acquired intangible assets		(30	)		(195	)
Restructuring and other recoveries		—			26
Loss on divestiture		—			(59	)
Expense on abandoned operating leases		—			(3	)
Change in fair value of earn-out liability		—			(1,100	)
Non-GAAP total operating expenses	$	60,111		$	50,973

Interest and other income (expense), net	$	4,444		$	27,762
Adjustment:
Gain on sale of non-marketable equity security		—			(23,924	)
Non-GAAP interest and other income (expense), net	$	4,444		$	3,838

Rambus Inc. Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (Unaudited)

2025 First Quarter Outlook	Three Months Ended March 31, 2025
(In millions)	Low			High
Forward-looking operating costs and expenses	$	105		$	101
Adjustments:
Stock-based compensation expense		(12	)		(12	)
Amortization of acquired intangible assets		(2	)		(2	)
Forward-looking Non-GAAP operating costs and expenses	$	91		$	87

View source version on businesswire.com: https://www.businesswire.com/news/home/20250203515060/en/

Desmond Lynch

Senior Vice President, Finance and Chief Financial Officer

(408) 462-8000

dlynch@rambus.com

Rambus Reports Fourth Quarter and Fiscal Year 2024 Financial Results