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 third 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)
		June 30, 2018				December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents		$	248,284			$	225,844
Marketable securities		50,056				103,532
Accounts receivable		39,263				25,326
Unbilled receivables		179,606				566
Inventories		6,041				5,159
Prepaids and other current assets		14,456				11,317
Total current assets		537,706				371,744
Intangible assets, net		70,940				91,722
Goodwill		208,680				209,661
Property, plant and equipment, net		50,235				54,303
Deferred tax assets		82,111				159,099
Unbilled receivables, long-term		571,269				—
Other assets		4,832				4,543
Total assets		$	1,525,773			$	891,072
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	8,386			$	9,614
Accrued salaries and benefits		17,385				17,091
Deferred revenue		13,583				18,272
Income taxes payable, short-term		18,794				258
Convertible notes, short-term		80,648				78,451
Other current liabilities		13,402				9,156
Total current liabilities		152,198				132,842
Long-term liabilities:
Convertible notes, long-term		138,647				135,447
Long-term imputed financing obligation		36,816				37,262
Long-term income taxes payable		84,804				3,344
Other long-term liabilities		7,823				10,593
Total long-term liabilities		268,090				186,646
Total stockholders’ equity		1,105,485				571,584
Total liabilities and stockholders’ equity		$	1,525,773			$	891,072

Rambus Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
Revenue:
Royalties		$	30,049			$	69,990			$	51,423			$	138,946
Product revenue		8,087				8,401				15,400				19,305
Contract and other revenue		18,322				16,329				36,061				33,820
Total revenue		56,458				94,720				102,884				192,071
Operating costs and expenses:
Cost of product revenue (1)		$	4,199			$	7,480			$	8,556			$	12,730
Cost of contract and other revenue		11,089				14,337				23,211				28,818
Research and development (1)		37,696				37,522				77,813				73,522
Sales, general and administrative (1)		24,483				27,137				54,681				55,323
Restructuring charges (recoveries)		(1,022		)		—				2,223				—
Total operating costs and expenses		76,445				86,476				166,484				170,393
Operating income (loss)		(19,987		)		8,244				(63,600		)		21,678
Interest income and other income (expense), net		8,249				129				17,365				283
Interest expense		(4,634		)		(3,261		)		(9,055		)		(6,467		)
Interest and other income (expense), net		3,615				(3,132		)		8,310				(6,184		)
Income (loss) before income taxes		(16,372		)		5,112				(55,290		)		15,494
Provision for (benefit from) income taxes		(1,015		)		2,507				(4,244		)		9,883
Net income (loss)		$	(15,357	)		$	2,605			$	(51,046	)		$	5,611
Net income (loss) per share:
Basic		$	(0.14	)		$	0.02			$	(0.47	)		$	0.05
Diluted		$	(0.14	)		$	0.02			$	(0.47	)		$	0.05
Weighted average shares used in per share calculation
Basic		107,737				110,060				108,542				110,758
Diluted		107,737				112,565				108,542				114,091
_________ (1) Total stock-based compensation expense for the three and six months ended June 30, 2018 and 2017 is presented as follows:
		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
Cost of product revenue		$	2			$	19			$	5			$	33
Research and development		$	3,286			$	3,067			$	6,478			$	6,079
Sales, general and administrative		$	(1,400	)		$	3,523			$	2,919			$	7,093

Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (In thousands) (Unaudited)
		Three Months Ended June 30,
		ASC 606				ASC 605
		2018				2018				2017
Operating costs and expenses		$	76,445			$	76,445			$	86,476
Adjustments:
Stock-based compensation expense		(1,888		)		(1,888		)		(6,609		)
Acquisition-related transaction costs and retention bonus expense		(30		)		(30		)		(90		)
Amortization expense		(8,738		)		(8,738		)		(10,450		)
Restructuring charges (recoveries)		1,022				1,022				—
Non-GAAP operating costs and expenses		$	66,811			$	66,811			$	69,327
Operating income (loss)		$	(19,987	)		$	22,375			$	8,244
Adjustments:
Stock-based compensation expense		1,888				1,888				6,609
Acquisition-related transaction costs and retention bonus expense		30				30				90
Amortization expense		8,738				8,738				10,450
Restructuring charges (recoveries)		(1,022		)		(1,022		)		—
Non-GAAP operating income (loss)		$	(10,353	)		$	32,009			$	25,393
Income (loss) before income taxes		$	(16,372	)		$	18,949			$	5,112
Adjustments:
Stock-based compensation expense		1,888				1,888				6,609
Acquisition-related transaction costs and retention bonus expense		30				30				90
Amortization expense		8,738				8,738				10,450
Restructuring charges (recoveries)		(1,022		)		(1,022		)		—
Non-cash interest expense on convertible notes		2,717				2,717				1,774
Non-GAAP income (loss) before income taxes		$	(4,021	)		$	31,300			$	24,035
GAAP provision for (benefit from) income taxes		(1,015		)		4,791				2,507
Adjustment to GAAP provision for (benefit from) income taxes		50				2,721				5,905
Non-GAAP provision for (benefit from) income taxes		(965		)		7,512				8,412
Non-GAAP net income (loss)		$	(3,056	)		$	23,788			$	15,623
Non-GAAP basic net income (loss) per share		$	(0.03	)		$	0.22			$	0.14
Non-GAAP diluted net income (loss) per share		$	(0.03	)		$	0.21			$	0.14
Weighted average shares used in non-GAAP per share calculation:
Basic		107,737				107,737				110,060
Diluted		107,737				111,157				112,565

Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1)
		Three Months Ended June 30,
		ASC 606			ASC 605
		2018			2018			2017
GAAP effective tax rate		6	%		25	%		49	%
Adjustment to GAAP effective tax rate		18	%		(1	)%		(14	)%
Non-GAAP effective tax rate		24	%		24	%		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 24 percent for 2018 and 35 percent for 2017, 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 for future periods.

Rambus Inc. Reconciliation of Other GAAP to Non-GAAP Items (In thousands, except percentages) (Unaudited)
		GAAP													Non-GAAP
		Three Months Ended June 30,													Three Months Ended June 30,
		ASC 606					ASC 605								ASC 606				ASC 605
		2018					2018				2017				2018				2018				2017
Revenue (i)		$		56,458			$	98,820			$	94,720			$	56,458			$	98,820			$	94,720
Operating income (loss) (ii)		(19,987			)		22,375				8,244				(10,353		)		32,009				25,393
Operating margin (ii/i)		(35			)%		23		%		9		%		(18		)%		32		%		27		%

		Three Months Ended June 30,
		ASC 605
		2018				2017
Net income		$	14,158			$	2,605
Add back:
Interest and other income (expense), net		3,426				3,132
Provision for income taxes		4,791				2,507
Depreciation expense		2,587				3,330
Amortization expense		8,738				10,450
EBITDA (1)		$	33,700			$	22,024
Adjustments:
Stock-based compensation expense		1,888				6,609
Acquisition-related transaction costs and retention bonus expense		30				90
Restructuring recoveries		(1,022		)		—
Adjusted EBITDA (2)		$	34,596			$	28,723

					(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. EBITDA is net income adjusted for net interest 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)
		ASC 606								ASC 605
		Three Months Ended September 30, 2018								Three Months Ended September 30, 2018
		Low				High				Low				High
Forward-looking operating costs and expenses		$	81.4			$	77.4			$	81.4			$	77.4
Adjustments:
Stock-based compensation expense		(7.5		)		(7.5		)		(7.5		)		(7.5		)
Amortization expense		(5.4		)		(5.4		)		(5.4		)		(5.4		)
Forward-looking Non-GAAP operating costs and expenses		$	68.5			$	64.5			$	68.5			$	64.5
Forward-looking operating income (loss)		$	(36.4	)		$	(26.4	)		$	15.6			$	25.6
Adjustments:
Stock-based compensation expense		7.5				7.5				7.5				7.5
Amortization expense		5.4				5.4				5.4				5.4
Forward-looking Non-GAAP operating income (loss)		$	(23.5	)		$	(13.5	)		$	28.5			$	38.5
Forward-looking income (loss) before income taxes		$	(33.5	)		$	(23.5	)		$	11.5			$	21.5
Adjustments:
Stock-based compensation expense		7.5				7.5				7.5				7.5
Amortization expense		5.4				5.4				5.4				5.4
Non-cash interest expense on convertible notes		2.7				2.7				2.7				2.7
Forward-looking Non-GAAP income (loss) before income taxes		$	(17.9	)		$	(7.9	)		$	27.1			$	37.1
Forward-looking GAAP provision for (benefit from) income taxes		(8.0		)		(5.6		)		2.8				5.2
Adjustment to Forward-looking GAAP provision for (benefit from) income taxes		3.7				3.7				3.7				3.7
Forward-looking Non-GAAP provision for (benefit from) income taxes		(4.3		)		(1.9		)		6.5				8.9
Forward-looking Non-GAAP net income (loss)		$	(13.6	)		$	(6.0	)		$	20.6			$	28.2
Forward-looking Non-GAAP basic net income (loss) per share		$	(0.13	)		$	(0.06	)		$	0.19			$	0.26
Forward-looking Non-GAAP diluted net income (loss) per share		$	(0.13	)		$	(0.06	)		$	0.19			$	0.25
Weighted average shares used in forward-looking Non-GAAP per share calculation:
Basic		108.0				108.0				108.0				108.0
Diluted		108.0				108.0				111.0				111.0

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