- Delivered strong Q4 results, in line with revenue and exceeding profitability expectations
SAN JOSE, Calif., Feb. 1, 2021 — (PRNewswire) — Rambus Inc. (NASDAQ: RMBS), a provider of industry-leading chips and IP making data faster and safer, today reported financial results for the fourth quarter ended December 31, 2020. GAAP revenue for the fourth quarter was $61.9 million; licensing billings were $64.2 million, product revenue was $21.8 million, and contract and other revenue was $12.4 million. The Company also generated $42.1 million in cash provided by operating activities in the fourth quarter, bringing the 2020 total to $185.5 million, up 44% year over year.
"Rambus delivered excellent results in 2020, fueled by focused execution, significant product growth, and sustained patent licensing," said Luc Seraphin, chief executive officer of Rambus. "With our cash generation enabling ongoing investment in our roadmap, we are well positioned to meet the expanding needs of data center and cloud, and are poised for continued profitable growth in the coming years."
Business Review
The shift to the cloud, along with the widespread advancement of artificial intelligence (AI) across data center, 5G, automotive and Internet of Things (IoT), has led to an exponential growth in data usage and increasing requirements on data infrastructure. Creating fast and safe connections, both in and across systems, remains one of the most mission-critical design challenges limiting performance in advanced hardware for these markets. As a provider of industry-leading chips and IP that solve the bottleneck between processing and memory in data center and cloud, Rambus is ideally suited to address these challenges.
The Company's Memory Interface Chip business had a record year, which is reflected in the annual product revenue growth of 56% year over year. This increase was driven by a combination of rising demand in data center and cloud and steady gains in DDR4 market share, allowing us to significantly outpace the growth in the overall market. For DDR5, Rambus remains in the leading position for qualification and is shipping early volumes to key customers.
The Rambus Silicon IP business continued its momentum with annual revenue up 14% and sustained design wins for interface and security IP as performance-hungry applications, like AI, continue to increase complexity in data center, 5G and the edge. This performance was supported by the successful integrations of the former Northwest Logic and Verimatrix teams acquired in late 2019.
Throughout the year, the Company signed multiple new patent licenses and renewed agreements with key customers, including DRAM licenses with CXMT and Micron. Extending many years into the future, these agreements demonstrate the ongoing strength and relevance of the patent portfolio and solidify a foundation of sustained cash generation.
Quarterly Financial Review - GAAP | Three Months Ended
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(In millions, except for percentages and per share amounts) | 2020 |
| 2019 | ||||
Revenue |
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Royalties | $ | 27.7 |
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| $ | 19.4 |
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Product revenue | 21.8 |
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| 26.6 |
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Contract and other revenue | 12.4 |
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| 13.9 |
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Total revenue | $ | 61.9 |
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| $ | 59.9 |
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Cost of product revenue | $ | 7.5 |
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| $ | 9.3 |
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Cost of contract and other revenue | $ | 1.6 |
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| $ | 1.6 |
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| Amortization of acquired intangible assets (included in total cost of revenue) | $ | 4.3 |
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| $ | 3.6 |
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| Total operating expenses (1) | $ | 59.5 |
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| $ | 58.6 |
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| Operating loss | $ | (11.0) |
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| $ | (13.2) |
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| Operating margin | (18) | % |
| (22) | % | ||
| Net loss | $ | (12.1) |
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| $ | (9.5) |
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| Diluted net loss per share | $ | (0.11) |
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| $ | (0.09) |
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| Net cash provided by operating activities | $ | 42.1 |
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| $ | 35.4 |
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| (1) | Includes amortization of acquired intangible assets of approximately $0.2 million and $0.3 million for the three
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