-
Annual revenue of $393.1 million, up 17% year over year; fourth
quarter revenue of $101.9 million, up 4% year over year
-
Fourth quarter GAAP diluted net loss per share of $0.29; fourth
quarter non-GAAP diluted net income per share of $0.19
-
Annual royalty revenue of $289.6 million and licensing billings of
$289.6 million; fourth quarter royalty revenue of $77.9 million and
licensing billings of $76.6 million
-
CryptoManager IoT Security Service selected by Cybertrust Japan, a
subsidiary of Softbank Technology Corp
-
Launched GDDR6 PHY to deliver comprehensive solution with Micron,
Northwest Logic and Avery Design for AI, Automotive and Networking
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ:RMBS) today reported financial results for the
fourth quarter ended December 31, 2017. Total revenue for the quarter
was $101.9 million, 4% higher than a year ago, with GAAP diluted net
loss per share of $0.29 and non-GAAP diluted net income per share of
$0.19. Total revenue for the year ended December 31, 2017 was $393.1
million, 17% higher than a year ago.
“Rambus has transitioned to focus on two key high-growth markets - the
data center and the mobile edge - with a product roadmap that leverages
our core competencies and key ingredient technologies to both
differentiate and accelerate our position in complementary markets,”
said Dr. Ron Black, chief executive officer of Rambus. “Our progress
throughout 2017, with strong execution on key product programs,
positions us well to deliver growth in 2018.”
Business Review
The Rambus Memory and Interface division augmented its suite of IP cores
for the data center throughout the year with the announcements of 56G
SerDes and High Bandwidth Memory Gen2 (HBM2) PHYs as part of our broad
portfolio for data center and networking. In addition, the team
announced the GDDR6 Memory PHY for Artificial Intelligence (AI),
automotive and networking, with a comprehensive solution to be offered
in conjunction with Micron, Northwest Logic and Avery Designs. Our chip
product offering grew with the launch of the DDR4 non-volatile DIMM
(NVDIMM) buffer chip and the industry’s first functional silicon of a
server DIMM buffer chipset capable of achieving the speeds expected for
next-generation DDR5.
Our Security division, which consists of our cryptography, mobile
payments and smart ticketing businesses, extended its product and
service portfolio with the launch of our Host Card Emulation (HCE)
Ticket Wallet Service and white-label mobile application, the Unified
Payment Platform, bringing bank-level security to retail “scan-and-go”,
and the CryptoManager IoT Security Service, protecting and monitoring
IoT endpoints. We continue to gain commercial traction across our
products and services with committed transport pilots and retail
deployments, as well as Cybertrust Japan, a subsidiary of Softbank
Technology Corp, selecting the CryptoManager IoT Security Service
protect their Secure IoT Platform®.
|
|
|
|
|
Financial Review
|
|
GAAP
|
|
Non-GAAP(1)
|
(In millions, except for percentages and per share amounts)
|
|
Three Months Ended December 31,
|
|
Three Months Ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue
|
|
$
|
101.9
|
|
|
$
|
97.6
|
|
|
$
|
101.9
|
|
|
$
|
97.6
|
|
Total operating costs and expenses
|
|
$
|
86.2
|
|
|
$
|
97.1
|
|
|
$
|
68.4
|
|
|
$
|
67.5
|
|
Operating income
|
|
$
|
15.7
|
|
|
$
|
0.5
|
|
|
$
|
33.5
|
|
|
$
|
30.1
|
|
Operating margin
|
|
|
15
|
%
|
|
|
1
|
%
|
|
|
33
|
%
|
|
|
31
|
%
|
Net income (loss)
|
|
$
|
(31.8
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
21.2
|
|
|
$
|
18.7
|
|
Diluted net income (loss) per share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
Total cash and marketable securities
|
|
$
|
329.4
|
|
|
$
|
172.2
|
|
|
$
|
329.4
|
|
|
$
|
172.2
|
|
Total assets
|
|
$
|
884.6
|
|
|
$
|
783.5
|
|
|
$
|
884.6
|
|
|
$
|
783.5
|
|
Total stockholders’ equity
|
|
$
|
564.9
|
|
|
$
|
552.8
|
|
|
$
|
564.9
|
|
|
$
|
552.8
|
|
|
|
|
|
|
|
|
|
|
Cashflows from operations
|
|
$
|
59.8
|
|
|
$
|
33.3
|
|
|
$
|
59.8
|
|
|
$
|
33.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Review
|
|
GAAP
|
|
Non-GAAP(1)
|
(In millions, except for percentages and per share amounts)
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue
|
|
$
|
393.1
|
|
|
$
|
336.6
|
|
|
$
|
393.1
|
|
|
$
|
336.6
|
|
Total operating costs and expenses
|
|
$
|
338.7
|
|
|
$
|
303.0
|
|
|
$
|
269.1
|
|
|
$
|
227.8
|
|
Operating income
|
|
$
|
54.4
|
|
|
$
|
33.6
|
|
|
$
|
124.0
|
|
|
$
|
108.8
|
|
Operating margin
|
|
|
14
|
%
|
|
|
10
|
%
|
|
|
32
|
%
|
|
|
32
|
%
|
Net income (loss)
|
|
$
|
(18.5
|
)
|
|
$
|
6.8
|
|
|
$
|
77.5
|
|
|
$
|
67.9
|
|
Diluted net income (loss) per share
|
|
$
|
(0.17
|
)
|
|
$
|
0.06
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
Cashflows from operations
|
|
$
|
117.4
|
|
|
$
|
92.5
|
|
|
$
|
117.4
|
|
|
$
|
92.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, the balance sheet items and cashflows from operations
are solely presented on a GAAP basis.
|
|
|
|
|
|
|
2017 Revenue and Licensing Billings
|
|
|
|
|
|
|
(In thousands)
|
|
Quarter ended
|
|
Year ended
|
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|
March 31, 2017
|
|
December 31, 2017
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
$
|
77,861
|
|
|
$
|
72,787
|
|
|
$
|
69,990
|
|
|
$
|
68,956
|
|
|
$
|
289,594
|
Product revenue
|
|
8,543
|
|
|
8,661
|
|
|
8,401
|
|
|
10,904
|
|
|
36,509
|
Contract and other revenue
|
|
15,487
|
|
|
17,686
|
|
|
16,329
|
|
|
17,491
|
|
|
66,993
|
Total revenue
|
|
$
|
101,891
|
|
|
$
|
99,134
|
|
|
$
|
94,720
|
|
|
$
|
97,351
|
|
|
$
|
393,096
|
|
|
|
|
|
|
|
|
|
|
|
Licensing billings (1)
|
|
$
|
76,611
|
|
|
$
|
71,537
|
|
|
$
|
72,890
|
|
|
$
|
68,556
|
|
|
$
|
289,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Revenue and Licensing Billings
|
|
|
|
|
|
|
(In thousands)
|
|
Quarter ended
|
|
Year ended
|
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
December 31, 2016
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
$
|
70,604
|
|
|
$
|
68,298
|
|
|
$
|
62,835
|
|
|
$
|
62,877
|
|
|
$
|
264,614
|
Product revenue
|
|
11,746
|
|
|
7,092
|
|
|
3,902
|
|
|
3,312
|
|
|
26,052
|
Contract and other revenue
|
|
15,209
|
|
|
14,465
|
|
|
9,764
|
|
|
6,493
|
|
|
45,931
|
Total revenue
|
|
$
|
97,559
|
|
|
$
|
89,855
|
|
|
$
|
76,501
|
|
|
$
|
72,682
|
|
|
$
|
336,597
|
|
|
|
|
|
|
|
|
|
|
|
Licensing billings (1)
|
|
$
|
64,854
|
|
|
$
|
71,548
|
|
|
$
|
66,604
|
|
|
$
|
61,683
|
|
|
$
|
264,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Licensing billings is an operational metric that reflects amounts
invoiced to our patent and technology licensing customers during the
period.
|
|
|
|
|
|
|
Revenue for the quarter was $101.9 million due to continued strength in
our licensing program. As a result of our execution in both businesses,
revenue for our Memory and Interface Division was up 8% year over year
and revenue for our Security Division was up 3% year over year. We had
GAAP operating income of $54.4 million for the year, an increase of 62%
year over year. In the fourth quarter, we had GAAP net loss per share of
$0.29, related primarily to a revaluation of our deferred tax assets in
conjunction with U.S. tax legislation passed in December 2017. In the
fourth quarter, we had non-GAAP net income per share of $0.19, at the
mid-point of our expectations.
Cash, cash equivalents, and marketable securities as of December 31,
2017 were $329.4 million, an increase of $145.7 million from September
30, 2017, mainly due to the issuance of $172.5 million aggregate
principal amount of the 2023 convertible notes during the quarter and
cash generated from operating activities of approximately $59.8 million,
offset by the $56.8 million paid to extinguish a portion of our existing
2018 convertible notes. Adjusted EBITDA for the quarter was $36.8
million.
2018 First Quarter Outlook
Effective January 1, 2018, the Company adopted Accounting Standards
Update No. 2014-09, Revenue from Contracts with Customers in Accounting
Standards Codification Topic 606 (“ASC 606”), which supersedes the
revenue recognition requirements in ASC Topic 605, Revenue Recognition
(“ASC 605”). The Company expects the adoption of ASC 606 to materially
impact the timing of revenue recognition for its fixed-fee intellectual
property licensing arrangements. The Company does not expect the
adoption of ASC 606 to have a material impact on its other revenue
streams, cashflow from operations, or the underlying financial position
of the Company.
The Company has provided its first quarter outlook under both ASC 606
and ASC 605 in order to provide additional transparency. The Company
believes that providing this additional disclosure in the short term
will help our investors and analysts understand the impact of the change
in revenue recognition standards, especially given the material
difference expected in the timing of revenue recognition for our
fixed-fee licensing arrangements as mentioned above. Note that the
presentation under ASC 605 is not a substitute for the new ASC 606
revenue recognition standard under GAAP applicable for the first quarter
of 2018.
Additionally, the guidance below under ASC 606 and ASC 605 excludes
results from our lighting division. Given that the lighting division has
been roughly breakeven for the Company, this exclusion does not impact
the Company’s outlook on profitability, though it does reduce revenue
outlook by roughly $4.0 million for the first quarter of 2018.
2018 First Quarter Outlook under ASC 606
|
|
|
|
|
(In millions, except per share amounts)
|
|
GAAP
|
|
Non-GAAP (1)
|
Revenue
|
|
$41 - $47
|
|
$41 - $47
|
Total operating costs and expenses
|
|
$86 - $82
|
|
$67 - $63
|
Operating loss
|
|
$45 - $35
|
|
$26 - $16
|
Diluted net loss per share
|
|
$0.34 - $0.27
|
|
$0.19 - $0.12
|
|
|
|
|
|
|
|
|
(1)
|
|
See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP
Forward Looking Estimates” tables included below. Note that the
applicable non-GAAP measures are presented and that revenue is
solely presented on a GAAP basis.
|
|
|
|
|
|
|
For the first quarter of 2018, the Company expects revenue under ASC 606
to be between $41 million and $47 million. The Company expects royalty
revenue to be between $21 million and $27 million, and roughly $20
million from product, contract and other revenue. Revenue is not without
risk and achieving revenue in this range will require that the Company
sign customer agreements for patent licensing, various product sales,
mobile payments software and solutions licensing among other matters.
The Company also expects operating costs and expenses to be between $86
million and $82 million, and diluted net loss per share to be between
$0.34 and $0.27. Additionally, the Company expects non-GAAP operating
costs and expenses to be between $67 million and $63 million, and
non-GAAP diluted net loss per share to be between $0.19 and $0.12. These
expectations also assume non-GAAP interest and other income and expense
of $2 million, tax rate of 24% (refer to non-GAAP financial information
below - income tax adjustments) and diluted share count of 110 million,
and exclude stock-based compensation expense ($8 million), amortization
expense ($11 million), and non-cash interest expense on convertible
notes ($3 million).
2018 First Quarter Outlook under ASC 605
|
|
|
|
|
(In millions, except per share amounts)
|
|
GAAP
|
|
Non-GAAP (1)
|
Revenue
|
|
$94 - $100
|
|
$94 - $100
|
Total operating costs and expenses
|
|
$86 - $82
|
|
$67 - $63
|
Operating income
|
|
$9 - $19
|
|
$27 - $37
|
Diluted net income per share
|
|
$0.03 - $0.09
|
|
$0.17 - $0.23
|
|
|
|
|
|
|
|
|
(1)
|
|
See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP
Forward Looking Estimates” tables included below. Note that the
applicable non-GAAP measures are presented and that revenue is
solely presented on a GAAP basis.
|
|
|
|
|
|
|
For the first quarter of 2018, the Company expects revenue under ASC 605
to be between $94 million and $100 million. The Company expects royalty
revenue to be between $74 million and $80 million, and roughly $20
million from product, contract and other revenue. Revenue is not without
risk and achieving revenue in this range will require that the Company
sign customer agreements for patent licensing, various product sales,
mobile payments software and solutions licensing among other matters.
The Company also expects operating costs and expenses to be between $86
million and $82 million, and diluted net income per share to be between
$0.03 and $0.09. Additionally, the Company expects non-GAAP operating
costs and expenses to be between $67 million and $63 million, and
non-GAAP diluted net income per share to be between $0.17 and
$0.23. These expectations also assume non-GAAP interest and other income
and expense of $2 million, tax rate of 24% (refer to non-GAAP financial
information below - income tax adjustments) and diluted share count of
114 million, and exclude stock-based compensation expense ($8 million),
amortization expense ($11 million), and non-cash interest expense on
convertible notes ($3 million).
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#8596527.
(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
margin, operating income (loss), net income (loss), diluted net income
(loss) per share and Adjusted EBITDA. 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,
loss on extinguishment of debt, 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.
Acquisition-related transaction costs and retention bonus expense.
These expenses include all direct costs of certain acquisitions and the
current periods’ portion of any retention bonus expense associated with
the acquisitions. The Company excludes these expenses in order to
provide better comparability between periods.
Purchase accounting adjustment for inventory fair value step-up. These
adjustments are the result of accounting for certain business
acquisitions and are excluded because such adjustments are
non-recurring. Additionally, the Company excludes these expenses in
order to provide better comparability between periods.
Amortization expense. The Company incurs expenses for the
amortization of intangible assets acquired in acquisitions. The Company
excludes these items because these expenses are not reflective of
ongoing operating results in the period incurred. These amounts arise
from the Company’s prior acquisitions and have no direct correlation to
the operation of the Company’s core business.
Impairment of long-lived assets. These charges consist of
non-cash charges to long-lived assets and are excluded because such
charges are non-recurring and do not reduce the Company’s liquidity.
Change in contingent consideration. This change is due to a
reduction of acquisition purchase consideration. This is a non-recurring
benefit that has no direct correlation to the operation of the Company's
business and no cash flow impact.
Loss on extinguishment of debt. The Company has excluded loss on
extinguishment of debt as this represents a cost of refinancing its
existing convertible notes and is not a reflection of the Company's
ongoing operations.
Non-cash interest expense on convertible notes. The Company
incurs non-cash interest expense related to its convertible notes. The
Company excludes non-cash interest expense related to its convertible
notes to provide more accurate comparisons of the Company’s results with
other peer companies and to more accurately reflect the Company’s
ongoing operations.
Income tax adjustments. For purposes of internal forecasting,
planning and analyzing future periods that assume net income from
operations, the Company estimates a fixed, long-term projected tax rate
of approximately 35 percent for both 2017 and 2016, and 24 percent for
2018 which consists of estimated U.S. federal and state tax rates, and
excludes tax rates associated with certain items such as withholding
tax, tax credits, deferred tax asset valuation allowance and the release
of any deferred tax asset valuation allowance. Accordingly, the Company
has applied these tax rates to its non-GAAP financial results for all
periods in the relevant years to assist the Company’s planning. The
Company has provided below a reconciliation of its GAAP provision for
income taxes and GAAP effective tax rate to the assumed non-GAAP
provision for income taxes and non-GAAP effective tax rate.
On occasion in the future, there may be other items, such as significant
gains or losses from contingencies that the Company may exclude in
deriving its non-GAAP financial measures if it believes that doing so is
consistent with the goal of providing useful information to investors
and management.
About Rambus Inc.
Dedicated to making data faster and safer, Rambus creates innovative
hardware, software and services that drive technology advancements from
the data center to the mobile edge. Our architecture licenses, IP cores,
chips, software, and services span memory and interfaces, security, and
emerging technologies to positively impact the modern world. We
collaborate with the industry, partnering with leading chip and system
designers, foundries, and service providers. Integrated into tens of
billions of devices and systems, our products power and secure diverse
applications, including Big Data, Internet of Things (IoT) security,
mobile payments, and smart ticketing. For more information, visit rambus.com.
Forward-Looking Statements
This release contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995 including those relating to
Rambus’ expectations regarding our new product and service offerings,
growth for 2018 and financial guidance for the first quarter of 2018,
including revenue, operating costs and expenses, earnings per share and
estimated, fixed, long-term projected tax rates, both on a GAAP and
non-GAAP basis as appropriate. Such forward-looking statements are based
on current expectations, estimates and projections, management’s beliefs
and certain assumptions made by Rambus’ management. Actual results may
differ materially. Rambus’ business generally is subject to a number of
risks which are described more fully in Rambus’ periodic reports filed
with the Securities and Exchange Commission. Rambus undertakes no
obligation to update forward-looking statements to reflect events or
circumstances after the date hereof.
|
Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
225,844
|
|
|
$
|
135,294
|
Marketable securities
|
|
103,532
|
|
|
36,888
|
Accounts receivable
|
|
25,892
|
|
|
21,099
|
Prepaids and other current assets
|
|
11,317
|
|
|
17,867
|
Inventories
|
|
5,159
|
|
|
5,633
|
Total current assets
|
|
371,744
|
|
|
216,781
|
Intangible assets, net
|
|
91,722
|
|
|
132,388
|
Goodwill
|
|
209,661
|
|
|
204,794
|
Property, plant and equipment, net
|
|
54,303
|
|
|
58,442
|
Deferred tax assets
|
|
152,651
|
|
|
168,342
|
Other assets
|
|
4,543
|
|
|
2,749
|
Total assets
|
|
$
|
884,624
|
|
|
$
|
783,496
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
9,614
|
|
|
$
|
9,793
|
Accrued salaries and benefits
|
|
17,091
|
|
|
14,177
|
Deferred revenue
|
|
18,272
|
|
|
16,932
|
Convertible notes, short-term
|
|
78,451
|
|
|
—
|
Other accrued liabilities
|
|
9,414
|
|
|
10,399
|
Total current liabilities
|
|
132,842
|
|
|
51,301
|
Long-term liabilities:
|
|
|
|
|
Convertible notes, long-term
|
|
135,447
|
|
|
126,167
|
Long-term imputed financing obligation
|
|
37,262
|
|
|
38,029
|
Other long-term liabilities
|
|
14,188
|
|
|
15,217
|
Total long-term liabilities
|
|
186,897
|
|
|
179,413
|
Total stockholders’ equity
|
|
564,885
|
|
|
552,782
|
Total liabilities and stockholders’ equity
|
|
$
|
884,624
|
|
|
$
|
783,496
|
|
|
|
|
|
|
|
|
Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Royalties
|
|
$
|
77,861
|
|
|
$
|
70,604
|
|
|
$
|
289,594
|
|
|
$
|
264,614
|
|
Product revenue
|
|
8,543
|
|
|
11,746
|
|
|
36,509
|
|
|
26,052
|
|
Contract and other revenue
|
|
15,487
|
|
|
15,209
|
|
|
66,993
|
|
|
45,931
|
|
Total revenue
|
|
101,891
|
|
|
97,559
|
|
|
393,096
|
|
|
336,597
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of product revenue (1)
|
|
5,901
|
|
|
8,748
|
|
|
23,783
|
|
|
21,329
|
|
Cost of contract and other product revenue
|
|
12,090
|
|
|
12,622
|
|
|
55,364
|
|
|
45,761
|
|
Research and development (1)
|
|
39,417
|
|
|
38,744
|
|
|
149,135
|
|
|
129,844
|
|
Sales, general and administrative (1)
|
|
28,818
|
|
|
25,466
|
|
|
110,940
|
|
|
95,145
|
|
Impairment of long-lived assets
|
|
—
|
|
|
18,300
|
|
|
—
|
|
|
18,300
|
|
Change in contingent consideration
|
|
—
|
|
|
(6,845
|
)
|
|
—
|
|
|
(6,845
|
)
|
Gain from sale of intellectual property
|
|
(54
|
)
|
|
—
|
|
|
(533
|
)
|
|
—
|
|
Gain from settlement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(579
|
)
|
Total operating costs and expenses
|
|
86,172
|
|
|
97,035
|
|
|
338,689
|
|
|
302,955
|
|
Operating income
|
|
15,719
|
|
|
524
|
|
|
54,407
|
|
|
33,642
|
|
Interest income and other income (expense), net
|
|
893
|
|
|
218
|
|
|
1,384
|
|
|
1,740
|
|
Loss on extinguishment of debt
|
|
(1,082
|
)
|
|
—
|
|
|
(1,082
|
)
|
|
—
|
|
Interest expense
|
|
(3,966
|
)
|
|
(3,248
|
)
|
|
(13,720
|
)
|
|
(12,745
|
)
|
Interest and other income (expense), net
|
|
(4,155
|
)
|
|
(3,030
|
)
|
|
(13,418
|
)
|
|
(11,005
|
)
|
Income (loss) before income taxes
|
|
11,564
|
|
|
(2,506
|
)
|
|
40,989
|
|
|
22,637
|
|
Provision for income taxes
|
|
43,331
|
|
|
939
|
|
|
59,450
|
|
|
15,817
|
|
Net income (loss)
|
|
$
|
(31,767
|
)
|
|
$
|
(3,445
|
)
|
|
$
|
(18,461
|
)
|
|
$
|
6,820
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.29
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.06
|
|
Diluted
|
|
$
|
(0.29
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.06
|
|
Weighted average shares used in per share calculation
|
|
|
|
|
|
|
|
|
Basic
|
|
109,737
|
|
|
110,788
|
|
|
110,198
|
|
|
110,162
|
|
Diluted
|
|
109,737
|
|
|
110,788
|
|
|
110,198
|
|
|
113,140
|
|
_________
(1) Total stock-based compensation expense for the three months and
years ended December 31, 2017 and 2016 are presented as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of product revenue
|
|
$
|
25
|
|
|
$
|
14
|
|
|
$
|
78
|
|
|
$
|
56
|
Research and development
|
|
$
|
3,137
|
|
|
$
|
2,639
|
|
|
$
|
12,185
|
|
|
$
|
9,165
|
Sales, general and administrative
|
|
$
|
4,072
|
|
|
$
|
3,004
|
|
|
$
|
15,140
|
|
|
$
|
11,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rambus Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
$
|
86,172
|
|
|
$
|
82,124
|
|
|
$
|
97,035
|
|
|
$
|
338,689
|
|
|
$
|
302,955
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
(7,234
|
)
|
|
(6,964
|
)
|
|
(5,657
|
)
|
|
(27,403
|
)
|
|
(21,013
|
)
|
Acquisition-related transaction costs and retention bonus expense
|
|
(30
|
)
|
|
(47
|
)
|
|
(197
|
)
|
|
(248
|
)
|
|
(3,235
|
)
|
Purchase accounting adjustment for inventory fair value step-up
|
|
—
|
|
|
—
|
|
|
(1,136
|
)
|
|
—
|
|
|
(2,304
|
)
|
Amortization expense
|
|
(10,526
|
)
|
|
(10,498
|
)
|
|
(11,093
|
)
|
|
(41,962
|
)
|
|
(37,138
|
)
|
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
(18,300
|
)
|
|
—
|
|
|
(18,300
|
)
|
Change in contingent consideration
|
|
—
|
|
|
—
|
|
|
6,845
|
|
|
—
|
|
|
6,845
|
|
Non-GAAP operating costs and expenses
|
|
$
|
68,382
|
|
|
$
|
64,615
|
|
|
$
|
67,497
|
|
|
$
|
269,076
|
|
|
$
|
227,810
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
15,719
|
|
|
$
|
17,010
|
|
|
$
|
524
|
|
|
$
|
54,407
|
|
|
$
|
33,642
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
7,234
|
|
|
6,964
|
|
|
5,657
|
|
|
27,403
|
|
|
21,013
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
30
|
|
|
47
|
|
|
197
|
|
|
248
|
|
|
3,235
|
|
Purchase accounting adjustment for inventory fair value step-up
|
|
—
|
|
|
—
|
|
|
1,136
|
|
|
—
|
|
|
2,304
|
|
Amortization expense
|
|
10,526
|
|
|
10,498
|
|
|
11,093
|
|
|
41,962
|
|
|
37,138
|
|
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
18,300
|
|
|
—
|
|
|
18,300
|
|
Change in contingent consideration
|
|
—
|
|
|
—
|
|
|
(6,845
|
)
|
|
—
|
|
|
(6,845
|
)
|
Non-GAAP operating income
|
|
$
|
33,509
|
|
|
$
|
34,519
|
|
|
$
|
30,062
|
|
|
$
|
124,020
|
|
|
$
|
108,787
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
11,564
|
|
|
$
|
13,931
|
|
|
$
|
(2,506
|
)
|
|
$
|
40,989
|
|
|
$
|
22,637
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
7,234
|
|
|
6,964
|
|
|
5,657
|
|
|
27,403
|
|
|
21,013
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
30
|
|
|
47
|
|
|
197
|
|
|
248
|
|
|
3,235
|
|
Purchase accounting adjustment for inventory fair value step-up
|
|
—
|
|
|
—
|
|
|
1,136
|
|
|
—
|
|
|
2,304
|
|
Amortization expense
|
|
10,526
|
|
|
10,498
|
|
|
11,093
|
|
|
41,962
|
|
|
37,138
|
|
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
18,300
|
|
|
—
|
|
|
18,300
|
|
Change in contingent consideration
|
|
—
|
|
|
—
|
|
|
(6,845
|
)
|
|
—
|
|
|
(6,845
|
)
|
Loss on extinguishment of debt
|
|
1,082
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
|
—
|
|
Non-cash interest expense on convertible notes
|
|
2,255
|
|
|
1,801
|
|
|
1,723
|
|
|
7,579
|
|
|
6,749
|
|
Non-GAAP income before income taxes
|
|
$
|
32,691
|
|
|
$
|
33,241
|
|
|
$
|
28,755
|
|
|
$
|
119,263
|
|
|
$
|
104,531
|
|
GAAP provision for income taxes
|
|
43,331
|
|
|
6,236
|
|
|
939
|
|
|
59,450
|
|
|
15,817
|
|
Adjustment to GAAP provision for income taxes
|
|
(31,889
|
)
|
|
5,398
|
|
|
9,125
|
|
|
(17,708
|
)
|
|
20,769
|
|
Non-GAAP provision for income taxes
|
|
11,442
|
|
|
11,634
|
|
|
10,064
|
|
|
41,742
|
|
|
36,586
|
|
Non-GAAP net income
|
|
$
|
21,249
|
|
|
$
|
21,607
|
|
|
$
|
18,691
|
|
|
$
|
77,521
|
|
|
$
|
67,945
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income per share
|
|
$
|
0.19
|
|
|
$
|
0.20
|
|
|
$
|
0.17
|
|
|
$
|
0.70
|
|
|
$
|
0.62
|
|
Non-GAAP diluted net income per share
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Weighted average shares used in non-GAAP per share calculation:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
109,737
|
|
|
109,555
|
|
|
110,788
|
|
|
110,198
|
|
|
110,162
|
|
Diluted
|
|
114,341
|
|
|
113,119
|
|
|
114,060
|
|
|
113,899
|
|
|
113,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax
Rate (1)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate
|
|
375
|
%
|
|
45
|
%
|
|
(38
|
)%
|
|
145
|
%
|
|
70
|
%
|
Adjustment to GAAP effective tax rate
|
|
(340
|
)%
|
|
(10
|
)%
|
|
73
|
%
|
|
(110
|
)%
|
|
(35
|
)%
|
Non-GAAP effective tax rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For purposes of internal forecasting, planning and analyzing future
periods that assume net income from operations, the Company
estimates a fixed, long-term projected tax rate of approximately 35
percent for both 2017 and 2016, which consists of estimated U.S.
federal and state tax rates, and excludes tax rates associated with
certain items such as withholding tax, tax credits, deferred tax
asset valuation allowance and the release of any deferred tax asset
valuation allowance. Accordingly, the Company has applied these tax
rates to its non-GAAP financial results for all periods in the
relevant year to assist the Company’s planning.
|
|
|
|
|
|
|
Rambus Inc.
Reconciliation of Other GAAP to Non-GAAP Items
(In thousands, except percentages)
(Unaudited)
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
Three Months Ended December 31,
|
|
Three Months Ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue (i)
|
|
$
|
101,891
|
|
|
$
|
97,559
|
|
|
$
|
101,891
|
|
|
$
|
97,559
|
|
Operating income (ii)
|
|
|
15,719
|
|
|
524
|
|
|
33,509
|
|
|
30,062
|
|
Operating margin (ii/i)
|
|
|
15
|
%
|
|
1
|
%
|
|
33
|
%
|
|
31
|
%
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue (i)
|
|
$
|
393,096
|
|
|
$
|
336,597
|
|
|
$
|
393,096
|
|
|
$
|
336,597
|
|
Operating income (ii)
|
|
|
54,407
|
|
|
33,642
|
|
|
124,020
|
|
|
108,787
|
|
Operating margin (ii/i)
|
|
|
14
|
%
|
|
10
|
%
|
|
32
|
%
|
|
32
|
%
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Net loss
|
|
$
|
(31,767
|
)
|
|
|
$
|
(3,445
|
)
|
|
Add back:
|
|
|
|
|
Interest and other income (expense), net
|
|
4,155
|
|
|
3,030
|
|
Provision for income taxes
|
|
43,331
|
|
|
939
|
|
Depreciation expense
|
|
3,304
|
|
|
3,577
|
|
Amortization expense
|
|
10,526
|
|
|
11,093
|
|
EBITDA (1)
|
|
$
|
29,549
|
|
|
$
|
15,194
|
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
7,234
|
|
|
5,657
|
|
Acquisition-related transaction costs and retention bonus expense
|
|
30
|
|
|
197
|
|
Purchase accounting adjustment for inventory fair value step-up
|
|
—
|
|
|
1,136
|
|
Impairment of long-lived assets
|
|
—
|
|
|
18,300
|
|
Change in contingent consideration
|
|
—
|
|
|
(6,845
|
)
|
|
Adjusted EBITDA (2)
|
|
$
|
36,813
|
|
|
$
|
33,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
EBITDA is a non-GAAP measure that management uses to evaluate the
cash generating capacity of the company. The most directly
comparable GAAP measure is net income (loss). EBITDA is net income
(loss) adjusted for net interest and other income (expense), income
taxes, and depreciation and amortization. It should not be
considered as an alternative to net income computed under GAAP.
|
|
|
|
(2)
|
|
Adjusted EBITDA excludes the impact of other non-GAAP adjustments
indicated in the above tables.
|
|
|
|
|
|
|
Rambus Inc.
Reconciliation of GAAP Forward Looking Estimates to Non-GAAP
Forward Looking Estimates
(In millions, except per share amounts)
(Unaudited)
|
|
|
|
2018 First Quarter Outlook under ASC 606
|
|
Three Months Ended March 31, 2018
|
|
|
Low
|
|
High
|
|
|
|
|
|
Forward-looking operating costs and expenses
|
|
$
|
85.5
|
|
|
$
|
81.5
|
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
(7.5
|
)
|
|
(7.5
|
)
|
Amortization expense
|
|
(11.0
|
)
|
|
(11.0
|
)
|
Forward-looking Non-GAAP operating costs and expenses
|
|
$
|
67.0
|
|
|
$
|
63.0
|
|
|
|
|
|
|
Forward-looking operating loss
|
|
$
|
(44.5
|
)
|
|
$
|
(34.5
|
)
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
7.5
|
|
|
7.5
|
|
Amortization expense
|
|
11.0
|
|
|
11.0
|
|
Forward-looking Non-GAAP operating loss
|
|
$
|
(26.0
|
)
|
|
$
|
(16.0
|
)
|
|
|
|
|
|
Forward-looking loss before income taxes
|
|
$
|
(48.9
|
)
|
|
$
|
(38.9
|
)
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
7.5
|
|
|
7.5
|
|
Amortization expense
|
|
11.0
|
|
|
11.0
|
|
Non-cash interest expense on convertible notes
|
|
2.7
|
|
|
2.7
|
|
Forward-looking Non-GAAP loss before income taxes
|
|
$
|
(27.7
|
)
|
|
$
|
(17.7
|
)
|
Forward-looking GAAP benefit from income taxes
|
|
(11.7
|
)
|
|
(9.3
|
)
|
Adjustment to forward-looking GAAP benefit from income taxes
|
|
5.1
|
|
|
5.1
|
|
Forward-looking Non-GAAP benefit from income taxes
|
|
(6.6
|
)
|
|
(4.2
|
)
|
Forward-looking Non-GAAP net loss
|
|
$
|
(21.1
|
)
|
|
$
|
(13.5
|
)
|
|
|
|
|
|
Forward-looking Non-GAAP basic net loss per share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.12
|
)
|
Forward-looking Non-GAAP diluted net loss per share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.12
|
)
|
Weighted average shares used in forward-looking Non-GAAP per share
calculation:
|
|
|
|
|
Basic
|
|
110.0
|
|
|
110.0
|
|
Diluted
|
|
110.0
|
|
|
110.0
|
|
|
|
|
|
|
|
|
2018 First Quarter Outlook under ASC 605 (1)
|
|
Three Months Ended March 31, 2018
|
|
|
Low
|
|
High
|
|
|
|
|
|
Forward-looking operating costs and expenses
|
|
$
|
85.5
|
|
|
$
|
81.5
|
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
(7.5
|
)
|
|
(7.5
|
)
|
Amortization expense
|
|
(11.0
|
)
|
|
(11.0
|
)
|
Forward-looking Non-GAAP operating costs and expenses
|
|
$
|
67.0
|
|
|
$
|
63.0
|
|
|
|
|
|
|
Forward-looking operating income
|
|
$
|
8.5
|
|
|
$
|
18.5
|
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
7.5
|
|
|
7.5
|
|
Amortization expense
|
|
11.0
|
|
|
11.0
|
|
Forward-looking Non-GAAP operating income
|
|
$
|
27.0
|
|
|
$
|
37.0
|
|
|
|
|
|
|
Forward-looking income before income taxes
|
|
$
|
4.1
|
|
|
$
|
14.1
|
|
Adjustments:
|
|
|
|
|
Stock-based compensation expense
|
|
7.5
|
|
|
7.5
|
|
Amortization expense
|
|
11.0
|
|
|
11.0
|
|
Non-cash interest expense on convertible notes
|
|
2.7
|
|
|
2.7
|
|
Forward-looking Non-GAAP income before income taxes
|
|
$
|
25.3
|
|
|
$
|
35.3
|
|
Forward-looking GAAP provision for income taxes
|
|
1.0
|
|
|
3.4
|
|
Adjustment to forward-looking GAAP provision for income taxes
|
|
5.1
|
|
|
5.1
|
|
Forward-looking Non-GAAP provision for income taxes
|
|
6.1
|
|
|
8.5
|
|
Forward-looking Non-GAAP net income
|
|
$
|
19.2
|
|
|
$
|
26.8
|
|
|
|
|
|
|
Forward-looking Non-GAAP basic net income per share
|
|
$
|
0.17
|
|
|
$
|
0.24
|
|
Forward-looking Non-GAAP diluted net income per share
|
|
$
|
0.17
|
|
|
$
|
0.23
|
|
Weighted average shares used in forward-looking Non-GAAP per share
calculation:
|
|
|
|
|
Basic
|
|
110.0
|
|
|
110.0
|
|
Diluted
|
|
114.4
|
|
|
114.4
|
|
(1)
|
|
See “2018 First Quarter Outlook” above for an explanation of the
presentation of this ASC 605 outlook.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180129006151/en/
Source: Rambus Inc.