Cash, cash equivalents, and marketable securities as of December 31, 2021 were $485.6 million, an increase of $65.9 million as compared to September 30, 2021, mainly due to cash provided by operating activities of approximately $72.2 million. Cash provided by operating activities for the year ended December 31, 2021 was $209.2 million, an increase of $23.7 million or 13%, from the same period in the prior year.
2022 First Quarter Outlook
The Company will discuss its full revenue guidance for the first quarter of 2022 during its upcoming conference call. The following table sets forth first quarter outlook for other measures.
(In millions) |
GAAP |
|
Non-GAAP (1) |
Licensing billings (2) |
$64 - $70 |
|
$64 - $70 |
Product revenue |
$43 - $49 |
|
$43 - $49 |
Contract and other revenue |
$12 - $18 |
|
$12 - $18 |
Total operating costs and expenses |
$84 - $80 |
|
$73 - $69 |
Interest and other income (expense), net |
($1) |
|
($1) |
Diluted share count |
115 |
|
115 |
____________________________ |
||
(1) |
See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below. Note that the applicable non-GAAP measures are presented, and that revenue is solely presented on a GAAP basis. |
|
(2) |
Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences. This metric is the same for both GAAP and non-GAAP presentations. |
For the first quarter of 2022, the Company expects licensing billings to be between $64 million and $70 million. The Company also expects royalty revenue to be between $30 million and $36 million, product revenue to be between $43 million and $49 million and contract and other revenue to be between $12 million and $18 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 $84 million and $80 million. Additionally, the Company expects non-GAAP operating costs and expenses to be between $73 million and $69 million. These expectations also assume non-GAAP interest and other income (expense), net, of ($1 million), tax rate of 24% and diluted share count of 115 million, and exclude stock-based compensation expense ($7 million), amortization expense ($4 million), non-cash interest expense on convertible notes ($2 million) and interest income related to the significant financing component from fixed-fee patent and technology licensing arrangements ($2 million).
Conference Call
Rambus management will discuss the results of the quarter during a conference call scheduled for 2:00 p.m. PT today. The call, 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: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID# 5264419.
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 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 expenses, acquisition-related costs and retention bonus expense, amortization of acquired intangible assets, restructuring and other charges, depreciation expense on unused Electronic Design Automation (“EDA”) software licenses, expense on abandoned operating leases, change in fair value of earn-out liability, 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 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.
