- First quarter revenue and billings in line with expectations; GAAP revenue of $48.4 million, with royalty revenue of $24.8 million and licensing billings of $75.4 million
- $28.8 million in cash provided by operating activities
- DDR4 server DIMM chipset revenue up nearly 40% year-over-year, fueled by continued market share growth
- Record revenue for IP Cores business; expanded portfolio with 32G PHY for 5G infrastructure and 112G LR PHY in 7nm for 400G and 800G networking
SUNNYVALE, Calif. — (BUSINESS WIRE) — April 22, 2019 — Rambus Inc. (NASDAQ: RMBS) today reported financial results for the first quarter ended March 31, 2019. Total revenue for the first quarter was in line with expectations at $48.4 million, with royalty revenue of $24.8 million and licensing billings of $75.4 million. The company also generated $28.8 million in cash provided by operating activities.
“Rambus had a solid first quarter, with continued execution from our product teams and a strong balance sheet fueled by cash generation from operations. We have refocused and augmented our product portfolio around our core strengths in semiconductor, to enable new design wins and increased market share,” said Luc Seraphin, chief executive officer of Rambus.
Business Review
Rambus product businesses made solid progress in the first quarter, with the addition of new products and design wins at leading chip and system manufacturers worldwide. We target performance-driven, high-growth markets including data center and networking, artificial intelligence and machine learning, IoT and automotive, where demand for data and security are at their highest.
The server DIMM chipset business had a positive quarter. Buffer chipset revenue was up nearly 40% from the same period last year, despite declines in the overall memory market due to near-term inventory corrections. Through steady increases in the number of OEM and data center qualifications, we are making continued gains in market share for DDR4 buffer chips. In addition to the growth in DDR4, we have established a first-mover position for next-generation DDR5 memory buffer chips and continue shipping samples at the top-end speeds for both the RCD and DB chips.
Our high-speed IP Cores business delivered record revenue and remains on a trajectory of approximately 50% compounded annual growth rate. We closed several new SoC design wins for data center, networking and artificial intelligence, including multiple new ASIC designs at a Tier 1 SoC customer. In addition to the tape out of the industry’s first commercial GDDR6 memory PHY on TSMC 7nm, we expanded our high-performance SerDes portfolio with a leadership 32G SerDes PHY to enable 5G infrastructure and a 112G SerDes PHY to enable next-generation 400G and 800G communications systems.
The Rambus Cryptography business saw the importance of semiconductor device-level security continue to grow in the industry. We increased our traction and opportunities for secure silicon IP, with a new design win at a major OEM and expanded agreements for our provisioning services. We continue to build momentum for our CryptoManager Root of Trust in our key verticals of artificial intelligence and data center.
| Quarterly Financial Review - GAAP |
Three Months Ended
|
||||||||
| (In millions, except for percentages and per share amounts) | 2019 | 2018 | |||||||
| Revenue | |||||||||
| Royalties | $ | 24.8 | $ | 21.4 | |||||
| Product revenue | 9.0 | 7.3 | |||||||
| Contract and other revenue | 14.6 | 17.7 | |||||||
| Total revenue | $ | 48.4 | $ | 46.4 | |||||
| Total operating costs and expenses | $ | 79.8 | $ | 90.0 | |||||
| Operating loss | $ | (31.4 | ) | $ | (43.6 | ) | |||
| Operating margin | (65 | )% | (94 | )% | |||||
| Net loss | $ | (26.6 | ) | $ | (35.7 | ) | |||
| Diluted net loss per share | $ | (0.24 | ) | $ | (0.33 | ) | |||
| Licensing billings (1) | $ | 75.4 | $ | 75.9 | |||||
| Net cash provided by operating activities | $ | 28.8 | $ | 16.8 | |||||
| (1) | Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences. |
| Quarterly Financial Review - Non-GAAP (1) |
Three Months Ended
|
||||||||
| (In millions, except for percentages and per share amounts) | 2019 | 2018 | |||||||
| Revenue | |||||||||
| Royalties | $ | 24.8 | $ | 21.4 | |||||
| Product revenue | 9.0 | 7.3 | |||||||
| Contract and other revenue | 14.6 | 17.7 | |||||||
| Total revenue | $ | 48.4 | $ | 46.4 | |||||
| Total operating costs and expenses | $ | 67.3 | $ | 68.7 | |||||
| Operating loss | $ | (18.9 | ) | $ | (22.3 | ) | |||
| Operating margin | (39 | )% | (48 | )% | |||||
| Net loss | $ | (9.2 | ) | $ | (11.3 | ) | |||
| Diluted net loss per share | $ | (0.08 | ) | $ | (0.10 | ) | |||
| (1) | See “Supplemental Reconciliation of GAAP to Non-GAAP Results” and “Reconciliation of Other GAAP to Non-GAAP Items” tables included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis. |
