Non-GAAP Financial Results (1):

Total non-GAAP operating costs and expenses in the third quarter of 2015 were $46.3 million, which was relatively flat as compared to the previous quarter, and 3% higher than the third quarter of 2014.

Total non-GAAP operating costs and expenses for the nine months ended September 30, 2015 were $137.8 million as compared to $132.8 million in the same period of 2014 due primarily to higher headcount related costs, higher expenses related to software design tools, higher cost of sales due to the sale of security and lighting products and higher prototyping costs offset by higher gain from sale of intellectual property, lower retention bonus expense from acquisitions and lower consulting costs.

Non-GAAP net income in the third quarter of 2015 was $17.0 million, 6% higher than the prior quarter and 14% higher than the third quarter of 2014. Non-GAAP diluted net income per share was $0.14 in the third quarter of 2015 as compared to $0.13 in the prior quarter and $0.13 in the third quarter of 2014.

Non-GAAP net income for the nine months ended September 30, 2015 was $50.0 million as compared to $53.4 million in the same period of 2014. Non-GAAP diluted net income per share was $0.42 for the nine months ended September 30, 2015 as compared to non-GAAP diluted net income per share of $0.45 in the same period of 2014.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of September 30, 2015 were $362.9 million, an increase of $14.8 million from June 30, 2015. The increase in cash was driven by operating activities.

During the third quarter of 2015, the Company recorded an income tax benefit of approximately $167.0 million. The Company's tax benefit includes $174 million tax benefit related to the release of its deferred tax asset valuation allowance against its U.S. deferred tax assets.

During the third quarter of 2015, the Company did not repurchase any shares of its common stock under its share repurchase program that authorizes the repurchase of up to an aggregate of 20.0 million shares.

Additionally, the Company announced that on October 16, 2015, its Board of Directors approved the commitment for a restructuring and a plan of termination resulting in a reduction of 8% of the Company’s headcount. The restructuring is expected to save approximately $10 million in 2016, from the current run rate, and the reductions in expense and associated workforce are expected to be completed by the first quarter of 2016. The total estimated cash payout related to the reduction in force will be approximately $3.5 million, which is related to severance and termination benefits. The estimated non-cash expense is expected to be approximately $1 million.

Fourth Quarter 2015 Outlook:

For the fourth quarter of 2015, the Company expects revenue to be between $71 million and $77 million. Achieving revenue in this range will require that the Company sign new customer agreements for patent and solutions licensing among other matters.

Conference Call:

The Company will host a conference call at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at investor.rambus.com. A replay will be available following the call as a webcast on the Rambus Investor Relations website and for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID# 55741229.

(1) 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, operating income (loss) and net income (loss). In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, restructuring charges, 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.