Rambus Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Rhea-AI Summary

Rambus (NASDAQ:RMBS) reported strong Q4 2024 financial results with record quarterly product revenue of $73.4 million, up 11% sequentially and 37% year over year. The company achieved total revenue of $161.1 million for Q4, comprising licensing billings of $63.6 million, product revenue of $73.4 million, and contract and other revenue of $29.5 million.

The company generated record annual cash from operations of $230.6 million for 2024, representing an 18% increase year over year. Q4 GAAP operating income was $57.9 million with a 36% operating margin. Net income reached $62.2 million, resulting in diluted earnings per share of $0.58. Cash, cash equivalents, and marketable securities stood at $481.8 million as of December 31, 2024.

Looking ahead to Q1 2025, Rambus projects product revenue between $72-78 million and licensing billings of $59-65 million.

Positive

• Record quarterly product revenue of $73.4M, up 37% YoY
• Record annual cash from operations of $230.6M, up 18% YoY
• Operating margin improved to 36% from 29% YoY
• Net income increased to $62.2M from $58.5M YoY
• Extended patent license agreement with Micron through 2029

Negative

• Licensing billings declined to $63.6M from $66.2M YoY
• Operating expenses increased to $71.7M from $63.0M YoY

Insights

Financial Analyst

Rambus's Q4 2024 results showcase exceptional execution and strategic positioning in the high-performance computing market. The standout 37% YoY growth in product revenue to $73.4 million demonstrates strong market penetration and growing demand for their memory interface solutions. The company's operational excellence is evident in the 7% improvement in operating margin to 36%, reflecting enhanced scalability and efficient cost management.

The record annual cash from operations of $230.6 million, up 18% YoY, highlights robust working capital management and strong cash conversion capabilities. With $481.8 million in cash and marketable securities, Rambus maintains significant financial flexibility for strategic investments and R&D initiatives.

Three key strategic developments deserve attention:

• The Micron patent license extension through 2029 provides predictable, high-margin licensing revenue streams
• Record new product introductions expand the company's addressable market in AI and data center segments
• Q1 2025 product revenue guidance of $72-78 million suggests continued momentum in core markets

The company's positioning in AI-driven computing infrastructure is particularly noteworthy, as increasing performance demands for memory interfaces and security solutions align perfectly with Rambus's core competencies. The combination of growing product revenue, stable licensing income and strong cash generation creates a compelling foundation for sustained growth.

• 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

SAN JOSE, Calif.--(BUSINESS WIRE)-- 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

Source: Rambus Inc.

FAQ

What was Rambus (RMBS) Q4 2024 product revenue and growth rate?

Rambus reported record quarterly product revenue of $73.4 million in Q4 2024, representing an 11% sequential increase and 37% year-over-year growth.

How much cash from operations did RMBS generate in 2024?

Rambus generated record annual cash from operations of $230.6 million in 2024, an 18% increase year over year.

What is RMBS's Q1 2025 revenue guidance?

For Q1 2025, Rambus projects product revenue between $72-78 million and licensing billings of $59-65 million.

What was Rambus's operating margin in Q4 2024?

Rambus achieved an operating margin of 36% in Q4 2024, up from 29% in the same quarter of the previous year.

What is the status of RMBS's patent license agreement with Micron?

Rambus extended its patent license agreement with Micron through 2029.