Rambus Reports Fourth Quarter and Fiscal Year 2022 Financial Results

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.

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.

Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect 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 24% for both 2022 and 2021, 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 provider of industry-leading chips and silicon IP making data faster and safer. With over 30 years of advanced semiconductor experience, we are a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences. 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 2023 and related drivers, and the Company’s ability to effectively manage supply chain shortages. 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, as well as the potential adverse impacts related to, or arising from, the COVID-19 and its variants. 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,

2022

 

December 31,

2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

125,334

 

$

107,891

Marketable securities

 

187,892

 

 

377,718

Accounts receivable

 

55,368

 

 

44,065

Unbilled receivables

 

125,698

 

 

135,608

Inventories

 

20,900

 

 

8,482

Prepaids and other current assets

 

12,022

 

 

10,600

Total current assets

 

527,214

 

 

684,364

Intangible assets, net

 

50,880

 

 

58,420

Goodwill

 

292,040

 

 

278,810

Property, plant and equipment, net

 

86,255

 

 

56,035

Operating lease right-of-use assets

 

24,143

 

 

23,712

Deferred tax assets

 

3,031

 

 

4,047

Unbilled receivables

 

25,222

 

 

123,018

Other assets

 

3,809

 

 

4,240

Total assets

$

1,012,594

 

$

1,232,646

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

24,815

 

$

11,279

Accrued salaries and benefits

 

20,502

 

 

20,945

Convertible notes

 

10,378

 

 

163,687

Deferred revenue

 

23,861

 

 

24,755

Income taxes payable

 

18,137

 

 

20,607

Operating lease liabilities

 

5,024

 

 

5,992

Other current liabilities

 

23,992

 

 

20,002

Total current liabilities

 

126,709

 

 

267,267

Long-term liabilities:

 

 

 

Long-term operating lease liabilities

 

29,079

 

 

29,099

Long-term income taxes payable

 

5,892

 

 

21,424

Deferred tax liabilities

 

24,964

 

 

23,985

Other long-term liabilities

 

46,653

 

 

28,475

Total long-term liabilities

 

106,588

 

 

102,983

Total stockholders’ equity

 

779,297

 

 

862,396

Total liabilities and stockholders’ equity

$

1,012,594

 

$

1,232,646

Rambus Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

December 31,

 

Years Ended

December 31,

(In thousands, except per share amounts)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

Product revenue

$

67,178

 

 

$

45,274

 

 

$

227,068

 

 

$

143,935

 

Royalties

 

31,436

 

 

 

32,893

 

 

 

139,816

 

 

 

136,706

 

Contract and other revenue

 

23,753

 

 

 

13,614

 

 

 

87,909

 

 

 

47,663

 

Total revenue

 

122,367

 

 

 

91,781

 

 

 

454,793

 

 

 

328,304

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of product revenue

 

28,209

 

 

 

13,408

 

 

 

88,976

 

 

 

49,397

 

Cost of contract and other revenue

 

1,615

 

 

 

727

 

 

 

4,668

 

 

 

4,756

 

Amortization of acquired intangible assets

 

3,560

 

 

 

3,603

 

 

 

13,935

 

 

 

16,241

 

Total cost of revenue

 

33,384

 

 

 

17,738

 

 

 

107,579

 

 

 

70,394

 

Gross profit

 

88,983

 

 

 

74,043

 

 

 

347,214

 

 

 

257,910

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

40,121

 

 

 

36,263

 

 

 

158,769

 

 

 

135,678

 

Sales, general and administrative

 

27,309

 

 

 

23,101

 

 

 

106,718

 

 

 

91,057

 

Amortization of acquired intangible assets

 

415

 

 

 

409

 

 

 

1,674

 

 

 

1,226

 

Restructuring and other charges

 

 

 

 

 

 

 

 

 

 

368

 

Change in fair value of earn-out liability

 

5,000

 

 

 

5,300

 

 

 

3,111

 

 

 

5,300

 

Total operating expenses

 

72,845

 

 

 

65,073

 

 

 

270,272

 

 

 

233,629

 

Operating income

 

16,138

 

 

 

8,970

 

 

 

76,942

 

 

 

24,281

 

Interest income and other income (expense), net

 

835

 

 

 

1,623

 

 

 

7,771

 

 

 

9,711

 

Gain on fair value of equity security

 

 

 

 

 

 

 

3,547

 

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

(83,626

)

 

 

 

Loss on fair value adjustment of derivatives, net

 

 

 

 

 

 

 

(10,585

)

 

 

 

Interest expense

 

(484

)

 

 

(2,737

)

 

 

(1,874

)

 

 

(10,706

)

Interest and other income (expense), net

 

351

 

 

 

(1,114

)

 

 

(84,767

)

 

 

(995

)

Income (loss) before income taxes

 

16,489

 

 

 

7,856

 

 

 

(7,825

)

 

 

23,286

 

Provision for income taxes

 

540

 

 

 

1,751

 

 

 

6,485

 

 

 

4,952

 

Net income (loss)

$

15,949

 

 

$

6,105

 

 

$

(14,310

)

 

$

18,334

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.15

 

 

$

0.06

 

 

$

(0.13

)

 

$

0.17

 

Diluted

$

0.14

 

 

$

0.05

 

 

$

(0.13

)

 

$

0.16

 

Weighted average shares used in per share calculation:

 

 

 

 

 

 

 

Basic

 

107,603

 

 

 

109,161

 

 

 

109,472

 

 

 

110,538

 

Diluted

 

110,820

 

 

 

114,534

 

 

 

109,472

 

 

 

114,865

 

Rambus Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Results

(Unaudited)

 

 

Three Months Ended

 

December 31,

(In thousands)

 

2022

 

 

 

2021

 

Cost of product revenue

$

28,209

 

 

$

13,408

 

Adjustment:

 

 

 

Stock-based compensation expense

 

(144

)

 

$

(112

)

Non-GAAP cost of product revenue

$

28,065

 

 

$

13,296

 

 

 

 

 

Total operating expenses

$

72,845

 

 

$

65,073

 

Adjustments:

 

 

 

Stock-based compensation expense

 

(10,122

)

 

 

(6,092

)

Acquisition-related costs and retention bonus expense

 

(1,028

)

 

 

(1,308

)

Amortization of acquired intangible assets

 

(415

)

 

 

(409

)

Expense on abandoned operating leases

 

(521

)

 

 

(559

)

Change in fair value of earn-out liability

 

(5,000

)

 

 

(5,300

)

Non-GAAP total operating expenses

$

55,759

 

 

$

51,405

 

 

 

 

 

Interest and other income (expense), net

$

351

 

 

$

(1,114

)

Adjustments:

 

 

 

Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements

 

(1,029

)

 

 

(1,907

)

Non-cash interest expense on convertible notes

 

10

 

 

 

1,954

 

Non-GAAP interest and other income (expense), net

$

(668

)

 

$

(1,067

)

Rambus Inc.

Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates

(Unaudited)

 

2023 First Quarter Outlook

 

Three Months Ended

March 31, 2023

(In millions)

 

Low

 

High

Forward-looking operating costs and expenses

 

$

103.7

 

 

$

99.7

 

Adjustments:

 

 

 

 

Stock-based compensation expense

 

 

(12.6

)

 

 

(12.6

)

Amortization of acquired intangible assets

 

 

(4.1

)

 

 

(4.1

)

Forward-looking Non-GAAP operating costs and expenses

 

$

87.0

 

 

$

83.0

 

 

 

 

 

 

Forward-looking interest and other income (expense), net

 

$

0.3

 

 

$

0.3

 

Adjustments:

 

 

 

 

Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements

 

 

(0.9

)

 

 

(0.9

)

Non-cash interest expense on convertible notes

 

 

0.1

 

 

 

0.1

 

Forward-looking Non-GAAP interest and other income (expense), net

 

$

(0.5

)

 

$

(0.5

)


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