Rambus Reports Third Quarter Financial Results

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(1) Total stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 is presented as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Cost of revenue	$	12	$	12	$	51	$	34
Research and development	$	1,548	$	1,648	$	5,303	$	5,574
Sales, general and administrative	$	2,008	$	1,781	$	6,395	$	5,587



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

	Three Months Ended									Nine Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014

Operating costs and expenses	$	56,139		$	57,258		$	55,244		$	168,419		$	166,757
Adjustments:
Stock-based compensation expense	(3,568		)	(4,415		)	(3,441		)	(11,749		)	(11,195		)
Acquisition-related transaction costs and retention bonus expense	—			—			(6		)	(2		)	(2,469		)
Amortization expense	(6,268		)	(6,323		)	(6,741		)	(18,914		)	(20,295		)
Restructuring charges	—			—			—			—			(39		)
Non-GAAP operating costs and expenses	$	46,303		$	46,520		$	45,056		$	137,754		$	132,759

Operating income	$	17,640		$	15,554		$	14,468		$	51,086		$	57,761
Adjustments:
Stock-based compensation expense	3,568			4,415			3,441			11,749			11,195
Acquisition-related transaction costs and retention bonus expense	—			—			6			2			2,469
Amortization expense	6,268			6,323			6,741			18,914			20,295
Restructuring charges	—			—			—			—			39
Non-GAAP operating income	$	27,476		$	26,292		$	24,656		$	81,751		$	91,759

Income before income taxes	$	15,062		$	12,666		$	10,860		$	42,669		$	35,574
Adjustments:
Stock-based compensation expense	3,568			4,415			3,441			11,749			11,195
Acquisition-related transaction costs and retention bonus expense	—			—			6			2			2,469
Amortization expense	6,268			6,323			6,741			18,914			20,295
Restructuring charges	—			—			—			—			39
Impairment of investment	—			—			600			—			600
Non-cash interest expense on convertible notes	1,605			1,581			1,515			4,745			13,226
Non-GAAP income before income taxes	$	26,503		$	24,985		$	23,163		$	78,079		$	83,398
GAAP provision for (benefit from) income taxes	(166,971		)	5,805			5,347			(155,727		)	17,214
Adjustment to GAAP provision for income taxes	176,512			3,190			2,992			183,836			12,810
Non-GAAP provision for income taxes	9,541			8,995			8,339			28,109			30,024
Non-GAAP net income	$	16,962		$	15,990		$	14,824		$	49,970		$	53,374

Non-GAAP basic net income per share	$	0.15		$	0.14		$	0.13		$	0.43		$	0.47
Non-GAAP diluted net income per share	$	0.14		$	0.13		$	0.13		$	0.42		$	0.45
Weighted average shares used in non-GAAP per share calculation:
Basic	116,444			116,027			114,523			115,940			114,080
Diluted	119,542			120,939			118,206			118,997			117,540



Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1)

	Three Months Ended						Nine Months Ended
	September 30, 2015		June 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014

GAAP effective tax rate	1,109	%	46	%	49	%	365	%	48	%
Adjustment to GAAP effective tax rate	(1,073	)%	(10	)%	(13	)%	(329	)%	(12	)%
Non-GAAP effective tax rate	36	%	36	%	36	%	36	%	36	%

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