SUNNYVALE, Calif. – April 24, 2017 – Rambus Inc. (NASDAQ:RMBS) today reported financial results for the first quarter ended March 31, 2017. Total revenue for the quarter was $97.4 million, which is 34% higher than a year ago, with GAAP diluted net income per share of $0.03 representing a 50% increase over Q1 of 2016 and non-GAAP diluted net income per share of $0.17 representing a 31% increase over Q1 of 2016.
“We continue to see strong support for our technologies and innovations beyond the traditional DRAM market with the signing of the license agreement with Western Digital for our Flash-based memory designs,” said Dr. Ron Black, chief executive officer of Rambus. “In addition, we introduced our Unified Payment Platform that enhances security, reduces costs for retailers, and delivers a seamless shopping experience for the consumer. Our execution in Q1 sets the foundation for growth for the remainder of 2017.”
In our Memory and Interfaces Division, we introduced our High Bandwidth Memory (HBM) PHY solution, available on GLOBALFOUNDRIES process technology, targeting networking and data center applications and designed for systems that require low latency and high bandwidth memory. Also this quarter, as part of a multi-company collaboration, Samsung taped out a 14nm network processor with our high-speed 28G SerDes solution. We also introduced the availability of our industry-leading 56G SerDes PHY and partnered with Samsung to develop it in their latest process technology. These solutions are designed to meet the growing demands of communications and data center applications. Our server DIMM chipset continues to supply the server market, shipping to the key customers in the data center market and we have extended the value of our portfolio beyond the DRAM market with our agreement with Western Digital to utilize our memory and security technologies.
Our Security Division, which consists of our cryptography, mobile payments and smart ticketing groups, had an important quarter with the launch of the Rambus Unified Payment Platform. This platform enhances payment security and reduces costs for retailers by easily integrating payment cards, gift cards, loyalty points, and coupons into a seamless shopping experience for consumers. It securely converts and manages digital value to enable consumers to pay with credit, points and coupons in a single transaction, and transform how they shop and pay.
Finally, our Emerging Solutions Division continues to make exciting progress with the announcement of our expanded collaboration with Microsoft on cryogenic memory. This joint effort focuses on enhancing memory capabilities, reducing energy consumption and improving overall system performance for future high-performance super computers (HPC) and quantum computers operating at cryogenic temperatures.
(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 and the balance sheet items are solely presented on a GAAP basis.
Revenue for the quarter was $97.4 million as execution in our Memory and Interfaces Division and our Security Division offset the anticipated seasonality of our Lighting Division. As a result of our execution on acquisitions, revenue for our Memory and Interface Division was up 32% year over year and revenue for the Security Division was up 65% year over year. GAAP total operating costs and expenses were lower than our expected range, yielding $0.03 of GAAP net income per share and in line with our expectations. We had non-GAAP net income per share of $0.17, at the high end of our expectations.
Cash, cash equivalents, and marketable securities as of March 31, 2017 were $187.6 million, an increase of $15.4 million from December 31, 2016, mainly due to cash generated from operating activities of $17.2 million. Adjusted EBITDA for the quarter was $34.0 million.
2017 Second Quarter Outlook
(1) See “Reconciliation of GAAP Forward Looking Estimates to Non-GAAP Forward Looking Estimates” tables included below.
For the second quarter of 2017, the Company expects revenue to be between $90 million and $96 million, reflecting our typical seasonality. 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 $90 million, and diluted net income (loss) per share to be between ($0.01) and $0.04. The Company also expects non-GAAP operating costs and expenses to be between $67 million and $71 million, and non-GAAP diluted net income per share to be between $0.10 and $0.16. These non-GAAP expectations assume non-GAAP interest and other income and expense of $1 million, tax rate of 35% (refer to non-GAAP financial information below – income tax adjustments) and diluted share count of 115 million, and exclude stock-based compensation expense ($8 million), amortization expense ($11 million), and non-cash interest expense on convertible notes ($2 million).
Rambus management will discuss the results of the quarter during a conference call scheduled for 2:00pm PT today. The call, audio and slides will be available online at investor.rambus.com and a replay will be available for the next week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#99301279.
About Rambus Inc.
Rambus creates innovative hardware and software technologies, driving advancements from the data center to the mobile edge. Our chips, customizable IP cores, architecture licenses, tools, software, services, training and innovations improve the competitive advantage of our customers. We collaborate with the industry, partnering with leading ASIC and SoC designers, foundries, IP developers, EDA companies and validation labs. Our products are integrated into tens of billions of devices and systems, powering and securing diverse applications, including Big Data, Internet of Things (IoT), mobile payments, and smart ticketing. At Rambus, we are makers of better. For more information, visit rambus.com.