(1) Total stock-based compensation expense for the three months ended March 31, 2018 and 2017 is presented as follows:
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Three Months Ended
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| 2018 | 2017 | ||||||
| Cost of product revenue | $ | 3 | $ | 14 | |||
| Research and development | $ | 3,192 | $ | 3,012 | |||
| Sales, general and administrative | $ | 4,319 | $ | 3,570 | |||
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Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (In thousands) (Unaudited) |
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| Three Months Ended | ||||||||||||
| ASC 606 | ASC 605 | |||||||||||
|
March 31,
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March 31,
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March 31,
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| Operating costs and expenses | $ | 90,039 | $ | 90,039 | $ | 83,917 | ||||||
| Adjustments: | ||||||||||||
| Stock-based compensation expense | (7,514 | ) | (7,514 | ) | (6,596 | ) | ||||||
| Acquisition-related transaction costs and retention bonus expense | (30 | ) | (30 | ) | (81 | ) | ||||||
| Amortization expense | (10,531 | ) | (10,531 | ) | (10,488 | ) | ||||||
| Restructuring charges | (3,245 | ) | (3,245 | ) | — | |||||||
| Non-GAAP operating costs and expenses | $ | 68,719 | $ | 68,719 | $ | 66,752 | ||||||
| Operating income (loss) | $ | (43,613 | ) | $ | 10,420 | $ | 13,434 | |||||
| Adjustments: | ||||||||||||
| Stock-based compensation expense | 7,514 | 7,514 | 6,596 | |||||||||
| Acquisition-related transaction costs and retention bonus expense | 30 | 30 | 81 | |||||||||
| Amortization expense | 10,531 | 10,531 | 10,488 | |||||||||
| Restructuring charges | 3,245 | 3,245 | — | |||||||||
| Non-GAAP operating income (loss) | $ | (22,293 | ) | $ | 31,740 | $ | 30,599 | |||||
| Income (loss) before income taxes | $ | (38,918 | ) | $ | 7,601 | $ | 10,382 | |||||
| Adjustments: | ||||||||||||
| Stock-based compensation expense | 7,514 | 7,514 | 6,596 | |||||||||
| Acquisition-related transaction costs and retention bonus expense | 30 | 30 | 81 | |||||||||
| Amortization expense | 10,531 | 10,531 | 10,488 | |||||||||
| Restructuring charges | 3,245 | 3,245 | — | |||||||||
| Non-cash interest expense on convertible notes | 2,679 | 2,679 | 1,749 | |||||||||
| Non-GAAP income (loss) before income taxes | $ | (14,919 | ) | $ | 31,600 | $ | 29,296 | |||||
| GAAP provision for (benefit from) income taxes | (1 | ) | 1,488 | 7,376 | ||||||||
| Adjustment to GAAP provision for (benefit from) income taxes | (3,580 | ) | 6,096 | 2,878 | ||||||||
| Non-GAAP provision for (benefit from) income taxes | (3,581 | ) | 7,584 | 10,254 | ||||||||
| Non-GAAP net income (loss) | $ | (11,338 | ) | $ | 24,016 | $ | 19,042 | |||||
| Non-GAAP basic net income (loss) per share | $ | (0.10 | ) | $ | 0.22 | $ | 0.17 | |||||
| Non-GAAP diluted net income (loss) per share | $ | (0.10 | ) | $ | 0.21 | $ | 0.17 | |||||
| Weighted average shares used in non-GAAP per share calculation: | ||||||||||||
| Basic | 109,358 | 109,358 | 111,464 | |||||||||
| Diluted | 109,358 | 112,968 | 115,325 | |||||||||
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Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1) |
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| Three Months Ended March 31, | |||||||||
| ASC 606 | ASC 605 | ASC 605 | |||||||
| 2018 | 2018 | 2017 | |||||||
| GAAP effective tax rate | 0 |
% |
20 | % | 71 |
% |
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| Adjustment to GAAP effective tax rate | 24 | % | 4 | % | (36 | )% | |||
| Non-GAAP effective tax rate | 24 | % | 24 | % | 35 |
% |
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| (1) | 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 24 percent for 2018 and 35 percent for 2017, 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 year to assist the Company’s planning for future periods. | ||||
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Rambus Inc. Reconciliation of Other GAAP to Non-GAAP Items (In thousands, except percentages) (Unaudited) |
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| GAAP | Non-GAAP | |||||||||||||||||||||||||
| Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||||||
| ASC 606 | ASC 605 | ASC 606 | ASC 605 | |||||||||||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||||||
| Revenue (i) | $ | 46,426 | $ | 100,459 | $ | 97,351 | $ | 46,426 | $ | 100,459 | $ | 97,351 | ||||||||||||||
| Operating income (loss) (ii) | (43,613 | ) | 10,420 | 13,434 | (22,293 | ) | 31,740 | 30,599 | ||||||||||||||||||
| Operating margin (ii/i) | (94 | )% | 10 | % | 14 | % | (48 | )% | 32 | % | 31 | % | ||||||||||||||
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Three Months Ended
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| ASC 605 | ||||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||||
| Net income | $ | 6,113 | $ | 3,006 | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Interest and other income (expense), net | 2,819 | 3,052 | ||||||||||||||||||||||||
| Provision for income taxes | 1,488 | 7,376 | ||||||||||||||||||||||||
| Depreciation expense | 2,942 | 3,392 | ||||||||||||||||||||||||
| Amortization expense | 10,531 | 10,488 | ||||||||||||||||||||||||
| EBITDA (1) | $ | 23,893 | $ | 27,314 | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Stock-based compensation expense | 7,514 | 6,596 | ||||||||||||||||||||||||
| Acquisition-related transaction costs and retention bonus expense | 30 | 81 | ||||||||||||||||||||||||
| Restructuring charges | 3,245 | — | ||||||||||||||||||||||||
| Adjusted EBITDA (2) | $ | 34,682 | $ | 33,991 | ||||||||||||||||||||||
| (1) | EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is net income. EBITDA is net income adjusted for net interest expense, income taxes, and depreciation and amortization. It should not be considered as an alternative to net income computed under GAAP. | ||||
| (2) | Adjusted EBITDA excludes the impact of other non-GAAP adjustments indicated in the above tables. | ||||
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Rambus Inc. Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates (In millions, except per share amounts) (Unaudited) |
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| ASC 606 | ASC 605 | |||||||||||||||
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Three Months Ended June 30,
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Three Months Ended June 30,
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| Low | High | Low | High | |||||||||||||
| Forward-looking operating costs and expenses | $ | 86.5 | $ | 82.5 | $ | 86.5 | $ | 82.5 | ||||||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation expense | (7.5 | ) | (7.5 | ) | (7.5 | ) | (7.5 | ) | ||||||||
| Amortization expense | (11.0 | ) | (11.0 | ) | (11.0 | ) | (11.0 | ) | ||||||||
| Forward-looking Non-GAAP operating costs and expenses | $ | 68.0 | $ | 64.0 | $ | 68.0 | $ | 64.0 | ||||||||
| Forward-looking operating income (loss) | $ | (44.5 | ) | $ | (34.5 | ) | $ | 7.5 | $ | 17.5 | ||||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation expense | 7.5 | 7.5 | 7.5 | 7.5 | ||||||||||||
| Amortization expense | 11.0 | 11.0 | 11.0 | 11.0 | ||||||||||||
| Forward-looking Non-GAAP operating income (loss) | $ | (26.0 | ) | $ | (16.0 | ) | $ | 26.0 | $ | 36.0 | ||||||
| Forward-looking income (loss) before income taxes | $ | (48.9 | ) | $ | (38.9 | ) | $ | 3.1 | $ | 13.1 | ||||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation expense | 7.5 | 7.5 | 7.5 | 7.5 | ||||||||||||
| Amortization expense | 11.0 | 11.0 | 11.0 | 11.0 | ||||||||||||
| Non-cash interest expense on convertible notes | 2.7 | 2.7 | 2.7 | 2.7 | ||||||||||||
| Forward-looking Non-GAAP income (loss) before income taxes | $ | (27.7 | ) | $ | (17.7 | ) | $ | 24.3 | $ | 34.3 | ||||||
| Forward-looking GAAP provision for (benefit from) income taxes | (11.7 | ) | (9.3 | ) | 0.7 | 3.1 | ||||||||||
| Adjustment to Forward-looking GAAP provision for (benefit from) income taxes | 5.1 | 5.1 | 5.1 | 5.2 | ||||||||||||
| Forward-looking Non-GAAP provision for (benefit from) income taxes | (6.6 | ) | (4.2 | ) | 5.8 | 8.3 | ||||||||||
| Forward-looking Non-GAAP net income (loss) | $ | (21.1 | ) | $ | (13.5 | ) | $ | 18.5 | $ | 26.0 | ||||||
| Forward-looking Non-GAAP basic net income (loss) per share | $ | (0.20 | ) | $ | (0.13 | ) | $ | 0.17 | $ | 0.24 | ||||||
| Forward-looking Non-GAAP diluted net income (loss) per share | $ | (0.20 | ) | $ | (0.13 | ) | $ | 0.17 | $ | 0.23 | ||||||
| Weighted average shares used in forward-looking Non-GAAP per share calculation: | ||||||||||||||||
| Basic | 107.0 | 107.0 | 107.0 | 107.0 | ||||||||||||
| Diluted | 107.0 | 107.0 | 111.0 | 111.0 | ||||||||||||
