Rambus Reports First Quarter 2023 Financial Results

Rambus Inc. Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	99,876	$	125,334
Marketable securities		192,261		187,892
Accounts receivable		59,408		55,368
Unbilled receivables		100,435		125,698
Inventories		26,180		20,900
Prepaids and other current assets		14,603		12,022
Total current assets		492,763		527,214
Intangible assets, net		46,936		50,880
Goodwill		292,040		292,040
Property, plant and equipment, net		89,393		86,255
Operating lease right-of-use assets		22,696		24,143
Deferred tax assets		2,623		3,031
Unbilled receivables		12,548		25,222
Other assets		3,631		3,809
Total assets	$	962,630	$	1,012,594

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,117	$	24,815
Accrued salaries and benefits		15,906		20,502
Convertible notes		—		10,378
Deferred revenue		20,846		23,861
Income taxes payable		15,669		18,137
Operating lease liabilities		4,287		5,024
Other current liabilities		21,349		23,992
Total current liabilities		96,174		126,709
Long-term liabilities:
Long-term operating lease liabilities		28,127		29,079
Long-term income taxes payable		3,963		5,892
Deferred tax liabilities		26,658		24,964
Other long-term liabilities		45,979		46,653
Total long-term liabilities		104,727		106,588
Total stockholders’ equity		761,729		779,297
Total liabilities and stockholders’ equity	$	962,630	$	1,012,594

Rambus Inc. Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2023			2022
Revenue:
Product revenue	$	63,775		$	47,969
Royalties		28,169			30,464
Contract and other revenue		21,818			20,617
Total revenue		113,762			99,050
Cost of revenue:
Cost of product revenue		26,423			18,397
Cost of contract and other revenue		1,691			624
Amortization of acquired intangible assets		3,562			3,378
Total cost of revenue		31,676			22,399
Gross profit		82,086			76,651
Operating expenses:
Research and development		41,898			39,815
Sales, general and administrative		30,964			26,906
Amortization of acquired intangible assets		382			409
Change in fair value of earn-out liability		6,900			1,200
Total operating expenses		80,144			68,330
Operating income		1,942			8,321
Interest income and other income (expense), net		2,161			1,360
Loss on extinguishment of debt		—			(66,497	)
Loss on fair value adjustment of derivatives, net		(240	)		(8,283	)
Interest expense		(381	)		(605	)
Interest and other income (expense), net		1,540			(74,025	)
Income (loss) before income taxes		3,482			(65,704	)
Provision for income taxes		201			514
Net income (loss)	$	3,281		$	(66,218	)
Net income (loss) per share:
Basic	$	0.03		$	(0.60	)
Diluted	$	0.03		$	(0.60	)
Weighted average shares used in per share calculation
Basic		108,277			109,889
Diluted		111,048			109,889

Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (Unaudited)

	Three Months Ended March 31,
(In thousands)	2023			2022
Cost of product revenue	$	26,423		$	18,397
Adjustment:
Stock-based compensation expense		(131	)		(125	)
Non-GAAP cost of product revenue	$	26,292		$	18,272

Total operating expenses	$	80,144		$	68,330
Adjustments:
Stock-based compensation expense		(12,932	)		(7,653	)
Acquisition-related costs and retention bonus expense		(825	)		(2,575	)
Amortization of acquired intangible assets		(382	)		(409	)
Expense on abandoned operating leases		(521	)		(539	)
Facility restoration costs		(316	)		—
Change in fair value of earn-out liability		(6,900	)		(1,200	)
Non-GAAP total operating expenses	$	58,268		$	55,954

Interest and other income (expense), net	$	1,540		$	(74,025	)
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements		(919	)		(1,827	)
Non-cash interest expense on convertible notes		3			105
Loss on extinguishment of debt		—			66,497
Loss on fair value adjustment of derivatives, net		240			8,283
Realized loss on sale of marketable securities sold for the purpose of notes repurchase		—			688
Non-GAAP interest and other income (expense), net	$	864		$	(279	)

Rambus Inc. Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (Unaudited)

2023 Second Quarter Outlook	Three Months Ended June 30, 2023
(In millions)	Low			High
Forward-looking operating costs and expenses	$	97.1		$	93.1
Adjustments:
Stock-based compensation expense		(11.1	)		(11.1	)
Amortization of acquired intangible assets		(4.0	)		(4.0	)
Forward-looking Non-GAAP operating costs and expenses	$	82.0		$	78.0

Forward-looking interest and other income (expense), net	$	0.6		$	0.6
Adjustments:
Interest income related to significant financing component from fixed-fee patent and technology licensing arrangements		(0.6	)		(0.6	)
Forward-looking Non-GAAP interest and other income (expense), net	$	—		$	—