Total non-GAAP operating costs and expenses in the second quarter of 2014 were $43.8 million which was relatively flat as compared to the prior quarter, and 6% lower than the second quarter of 2013.

Total non-GAAP operating costs and expenses for the six months ended June 30, 2014 were $87.7 million as compared to $93.4 million in the same period of 2013 due primarily to lower bonus accrual, lower general litigation expenses and lower consulting costs offset by higher cost of sales due to the sale of lighting products.

Non-GAAP net income in the second quarter of 2014 was $18.9 million, 4% lower than the prior quarter and 273% higher than the second quarter of 2013. Non-GAAP diluted net income per share was $0.16 in the second quarter of 2014 as compared to $0.17 in the prior quarter and $0.04 in the second quarter of 2013.

Non-GAAP net income for the six months ended June 30, 2014 was $38.6 million as compared to $15.9 million in the same period of 2013. Non-GAAP diluted net income per share was $0.33 for the six months ended June 30, 2014 as compared to non-GAAP diluted net income per share of $0.14 for the six months ended June 30, 2013.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of June 30, 2014 were $246.4 million, a decrease of $157.0 million from March 31, 2014. During the second quarter of 2014, the Company paid upon maturity $172.5 million of the 5% convertible senior notes due June 2014.

During the second quarter of 2014, the Company recorded an income tax provision of approximately $6.4 million. As the Company continues to maintain a full valuation allowance against its U.S. deferred tax assets, the Company’s tax provision consists of primarily foreign withholding taxes.

Third Quarter 2014 Outlook:

For the third quarter of 2014, the Company expects revenue to be between $68 million and $73 million. Revenue is not without risk and includes expectations that the Company will sign new customers for patent as well as solutions licensing.

Conference Call:

The Company will host a conference call at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at investor.rambus.com. A replay will be available following the call on the Rambus Investor Relations website or for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#70409115.

(1) 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: operating costs and expenses, operating income (loss) and net income (loss). In computing each of these non-GAAP financial measures, the following items were considered: stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, costs of restatement and related legal activities, restructuring charges, severance costs, 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. 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 they 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 transaction costs and retention bonus expense. These expenses include all direct costs of certain acquisitions 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.

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

Amortization expense. 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 core operation of the Company’s business.