Rambus Reports Second Quarter 2019 Financial Results

  • Second quarter revenue and billings in line with expectations; GAAP revenue of $58.3 million, with royalty revenue of $27.1 million and licensing billings of $64.9 million
  • $38.7 million in cash provided by operating activities
  • Executing on our strategic semiconductor portfolio refocus with agreement to sell Payments and Ticketing business to Visa, and agreement to acquire digital controller IP provider, Northwest Logic
  • Record quarterly revenue for both IP Cores and Server DIMM Chipset businesses

SUNNYVALE, Calif. — (BUSINESS WIRE) — July 29, 2019 — Rambus Inc. (NASDAQ: RMBS) today reported financial results for the second quarter ended June 30, 2019. Total revenue for the second quarter was in line with expectations at $58.3 million, with royalty revenue of $27.1 million and licensing billings of $64.9 million. The company also generated $38.7 million in cash provided by operating activities.

“Rambus made great progress toward our strategic vision to refocus on our core strengths in semiconductor, optimize for operational efficiency, and reinvest for growth,” said Luc Seraphin, chief executive officer of Rambus. “Propelled by strong operational execution and gains in market share, we delivered a solid second quarter.”

Business Review

Rambus took several significant steps in support of our strategic vision this quarter. The first was an agreement to sell our Payments and Ticketing business to Visa, simplifying our portfolio and redefining our perimeter to focus on the semiconductor market. Following that, we announced an agreement to acquire Northwest Logic to augment our interface IP offerings with best-in-class digital controllers, amplifying our market and technology position through new investments in our core focus area. In addition to these strategic steps, Rambus business units continued to deliver organic growth with overall product revenue for server DIMM chips and silicon IP, including IP Cores and Cryptography, increasing quarter over quarter.

Revenue was up significantly for our Server DIMM Chipset business, despite declines in the overall memory market, and the business is on track for 50% growth on the year as a whole. This growth continues to be driven by increased OEM and data center qualifications, leading to steady gains in our DDR4 buffer chip market share. In addition to the gains in DDR4, we remain well positioned as the first-mover for next-generation DDR5 server DIMM chips, shipping samples at the top-end speeds for both the RCD and DB chips.

Our high-speed IP Cores business delivered record revenue for the second consecutive quarter and remains on a trajectory of approximately 50% compounded annual growth rate. We announced the addition of our 112G SerDes PHY for 400G and 800G networking, a GDDR6 win at Achronix and continue to close new Tier 1 SoC design wins for data center, networking and artificial intelligence. In line with our strategy of investing in our focus areas, we have signed an agreement to acquire the digital controller company, Northwest Logic, and will be integrating their offerings and design team into our IP Cores business. As a market leader in memory, PCIe and MIPI digital controllers, Northwest Logic will expand our solutions by creating a complementary product portfolio of PHYs and controllers for data center, AI, communications and automotive.

The Cryptography business is delivering on an application-driven product roadmap with the launch of the expanded family of CryptoManager Root of Trust secure processor cores. The family now includes a comprehensive suite of configurations, tailored for artificial intelligence, data center, automotive and government, making the cores readily available to the market and easy to integrate for our customers. Focused on creating the most resilient and deployable embedded security on market, our simplified go-to-market strategy to deliver secure silicon IP and provisioning solutions to our customers is gaining traction with our first security win in artificial intelligence (AI) at a leading provider of AI accelerators.

Quarterly Financial Review - GAAP

Three Months Ended
June 30,

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

2019

 

2018

Revenue

 

 

 

Royalties

$

27.1

 

 

$

30.1

 

Product revenue

16.0

 

 

8.1

 

Contract and other revenue

15.2

 

 

18.3

 

Total revenue

$

58.3

 

 

$

56.5

 

Total operating costs and expenses

$

95.3

 

 

$

76.4

 

Operating loss

$

(37.0

)

 

$

(19.9

)

Operating margin

(64

)%

 

(35

)%

Net loss

$

(37.0

)

 

$

(15.4

)

Diluted net loss per share

$

(0.33

)

 

$

(0.14

)

 

 

 

 

Licensing billings (1)

$

64.9

 

 

$

73.2

 

 

 

 

 

Net cash provided by operating activities

$

38.7

 

 

$

3.6

 

(1)

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

Quarterly Financial Review - Non-GAAP (1)

Three Months Ended June 30,

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

2019

 

2018

Revenue

 

 

 

Royalties

$

27.1

 

 

$

30.1

 

Product revenue

16.0

 

 

8.1

 

Contract and other revenue

15.2

 

 

18.3

 

Total revenue

$

58.3

 

 

$

56.5

 

Total operating costs and expenses

$

64.1

 

 

$

66.8

 

Operating loss

$

(5.8

)

 

$

(10.3

)

Operating margin

(10

)%

 

(18

)%

Net income (loss)

$

0.2

 

 

$

(3.1

)

Diluted net income (loss) per share

$

0.00

 

 

$

(0.03

)

(1)

See “Supplemental Reconciliation of GAAP to Non-GAAP Results” and “Reconciliation of Other GAAP to Non-GAAP Items” tables included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis.


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