- Strong quarter, delivering on revenue, exceeding expectations for profit and generating $44.1 million in cash provided by operating activities
SAN JOSE, Calif., Nov. 2, 2020 — (PRNewswire) — Rambus Inc. (NASDAQ: RMBS), a premier silicon IP and chip provider making data faster and safer, today reported financial results for the third quarter ended September 30, 2020. GAAP revenue for the third quarter was $56.9 million; licensing billings were $63.1 million, product revenue was $29.8 million, and contract and other revenue was $10.5 million. The Company also generated $44.1 million in cash provided by operating activities.
"With our sustained focus on cloud and data center markets, Rambus had a very solid third quarter driven by great execution across our businesses," said Luc Seraphin, chief executive officer of Rambus. "Our proven track record of cash generation and ability to deliver on revenue and profit makes us well positioned for strong top-line growth in 2021."
Business Review
The Company's memory interface chip business had a solid quarter, continuing to significantly outpace market growth with a 39% increase in quarterly revenue year over year. This growth is driven by ongoing increases in market share in DDR4 and continued demand in cloud and data center. For the industry transition to DDR5, Rambus is in a leading position for qualification with the memory ecosystem and CPU partners in next-generation systems.
Growing complexity in SoC design across data center, AI and 5G markets continues to drive customer engagement for the Rambus Silicon IP business, with an increasing number of design wins in interface and security IP. Designed to meet the needs of the most demanding data center AI/ML workloads, Rambus leads the industry with the fastest, silicon-demonstrated HBM2E memory interface solution capable of running up to 4 Gbps.
Lastly, Rambus extended its DRAM license agreement with Micron for an additional four years. The extension maintains the existing financial terms of the agreement, providing Micron with a license to the Company's extensive portfolio of memory interface patents through December of 2024.
Quarterly Financial Review - GAAP | Three Months Ended September 30, | ||||||
(In millions, except for percentages and per share amounts) | 2020 |
| 2019 | ||||
Revenue |
|
|
| ||||
Royalties | $ | 16.6 |
|
| $ | 19.4 |
|
Product revenue | 29.8 |
|
| 21.4 |
| ||
Contract and other revenue | 10.5 |
|
| 16.6 |
| ||
Total revenue | $ | 56.9 |
|
| $ | 57.4 |
|
Cost of product revenue | $ | 9.7 |
|
| $ | 7.1 |
|
Cost of contract and other revenue | $ | 1.3 |
|
| $ | 2.5 |
|
Amortization of acquired intangible assets (included in total cost of revenue) | $ | 4.3 |
|
| $ | 3.0 |
|
| Total operating expenses (1) | $ | 54.2 |
|
| $ | 67.7 |
|
| Operating loss | $ | (12.5) |
|
| $ | (22.9) |
|
| Operating margin | (22) | % |
| (40) | % | ||
| Net loss | $ | (12.8) |
|
| $ | (17.3) |
|
| Diluted net loss per share | $ | (0.11) |
|
| $ | (0.16) |
|
| Net cash provided by operating activities | $ | 44.1 |
|
| $ | 25.6 |
|
|
|
|
| (1) | Includes amortization of acquired intangible assets of approximately $0.2 million for each of the three months ended
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