- 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
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 EndedDecember
31,
Year EndedDecember 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 EndedDecember
31,
Three Months EndedDecember
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 EndedDecember 31,
Year EndedDecember 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 EndedDecember
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 EndedMarch 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 EndedMarch 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/
Rambus Inc.Rahul Mathur, 408-462-8000Senior Vice President,
Finance and Chief Financial Officerrmathur@rambus.com
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