RAMBUS INC Q3 FY2024 earnings call

• Luc mentioned Q3 delivered strong sequential growth with double-digit product revenue growth, fueled by DDR5 memory interface chips. Generated $62 million cash from operations and repurchased $50 million of stock in Q3. • Introduced complete chipsets for DDR5 MRDIMM at 12,800 MT/s and RDIMMs at 8,000 MT/s, expanding addressable market. • AI driving momentum in IP business with introduction of HBM4 Memory Controller IP. • DDR4 sales remain modest, with most growth from DDR5. • Silicon IP business expected to grow in line with 10%-15% annual targets, with sales split between licensing billings and contract and other revenue.

In Q3, product revenue was $66.4 million, up 17% sequentially and 27% year-over-year, driven by DDR5. Royalty revenue was $64.1 million, licensing billings were $65.4 million. Contract and other revenue was $15 million, predominantly consisting of silicon IP. Silicon IP revenue was relatively flat quarter-over-quarter at $28 million to $29 million, with a shift in classification between licensing billings (from off-the-shelf IP) and contract and other revenue (from customized IP).

• Q4 revenue under ASC 606 expected between $154 million and $160 million, royalty revenue $54 million to $60 million, licensing billings $57 million to $63 million. • Q4 non-GAAP total operating costs (including COGS) expected between $82 million and $86 million. • Q4 capital expenditures expected ~$11 million. • Non-GAAP earnings per share expected to range between $0.52 and $0.59. • Anticipate Q4 non-GAAP operating results between a profit of $68 million and $78 million.

Actual results could differ materially from guidance due to monitoring of the macro environment, as mentioned in the forward-looking statements which are subject to risks and uncertainties described in SEC filings.

Q: Kevin Cassidy asked about silicon IP revenue classification and shift between contract and other and licensing billings A: Desmond Lynch explained silicon IP can be customized (contract and other) or off-the-shelf (licensing billings), with silicon IP revenue flat quarter-over-quarter but shift in classification leading to higher licensing billings offset by lower contract and other revenue Q: Blayne Curtis asked about DDR4 sales and recovery A: Luc Seraphin stated DDR4 sales remain modest, with sixth consecutive decline in channel inventories, but most product growth from Q3 to Q4 is from DDR5 Q: Mehdi Hosseini asked about product revenue growth and drivers A: Luc Seraphin said main contributor to product revenue growth is DDR5 market share, with modest contribution from companionship and PMIC products Q: Nam Kim asked about CXL controller chip development and market sentiment A: Luc Seraphin mentioned CXL IP growth in silicon IP, product in customers' hands, market fragmentation at CXL 3.0 node, and focus on MRDIMM for memory expansion Q: Gary Mobley asked about MRDIMM market share and market evolution A: Luc Seraphin confirmed MRDIMM is JEDEC standard, with goal to gain similar market share as in DDR5, and MRDIMM for high-bandwidth applications like AI boxes Q: Kevin Cassidy asked about MRDIMM market adoption and content A: Luc Seraphin explained MRDIMM for high-bandwidth applications like AI boxes, with content 4 times that of RDIMM, not cannibalizing RDIMM market Q: Mehdi Hosseini asked about HBM4 IP comparison to HBM3 and OpEx leverage A: Luc Seraphin said HBM4 differs in speed from HBM3, basic offering same; Desmond Lynch discussed OpEx leverage with R&D around 23%-25% of revenue and SG&A stable at $19M-$20M per quarter Q: Nam Kim asked about MRDIMM vs MCR DIMM involvement A: Luc Seraphin stated Rambus participates in JEDEC standards related to MRDIMM, focusing on JEDEC standards for market traction and growth