- Excellent quarter, exceeding expectations; GAAP revenue of $59.9 million; with licensing billings of $63.8 million, product revenue of $26.6 million, and contract and other revenue of $13.9 million
SUNNYVALE, Calif., Jan. 27, 2020 — (PRNewswire) — Rambus Inc. (NASDAQ: RMBS) today reported financial results for the fourth quarter ended December 31, 2019. Total revenue for the fourth quarter was towards the high end of guidance at $59.9 million; licensing billings were $63.8 million, product revenue was $26.6 million, and contract and other revenue was $13.9 million. The Company also generated $35.4 million in cash provided by operating activities in the fourth quarter, bringing the 2019 total to $128.5 million, up 48% year over year.
"Rambus had an excellent fourth quarter, concluding a very strong year that was propelled by robust cash from operations and record Q4 and annual revenue from memory interface chips and silicon IP," said Luc Seraphin, chief executive officer of Rambus. "By realigning the Company around our core strengths in semiconductor and augmenting our product portfolio, we are well-positioned for continued success in 2020."
Business Review
Guided by our strategic objectives, Rambus continues to focus on our core strength in semiconductor, optimize the Company for operational efficiency, and leverage our strong cash generation to re-invest for growth. Consistent with those priorities, we redefined our perimeter in 2019 with significant M&A activity throughout the year and focused the Company on Memory Interface Chips and Silicon IP solutions for the semiconductor market. The Company closed the sale of its Payments and Ticketing business to Visa and completed two silicon IP acquisitions, Northwest Logic for digital controllers, and the secure silicon IP and protocols businesses of Verimatrix, formerly Inside Secure.
Rambus continues to execute and demonstrate success across our product lines. We delivered the second consecutive year of record revenue from products, with combined results from our Memory Interface Chips and Silicon IP businesses achieving over 64% growth year over year from 2018.
Memory Interface Chips was the fastest growing business, with annual revenue almost doubling year over year. Driven by increased OEM and data center qualifications, we saw steady gains in our DDR4 memory interface chip market share in Q4 and delivered the third consecutive quarter of record revenue. The Company remains well positioned as a first mover for the industry transition to DDR5.
Silicon IP delivered record revenue in Q4 and drove sustained growth throughout the year with numerous design wins at tier-1 SoC customers across our target markets for both interface and security IP solutions. Most recently, Rambus announced that Enflame Technology has selected our HBM2 PHY and controller as part of their next-generation AI training chip. In addition, we expanded our portfolio of solutions addressing the fast-growing and demanding applications in AI, 5G and data center with the launch of a comprehensive PCIe 5 interface solution.
Quarterly Financial Review - GAAP | Three Months Ended
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(In millions, except for percentages and per share amounts) | 2019 |
| 2018 | ||||
Revenue |
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Royalties | $ | 19.4 |
|
| $ | 45.4 |
|
Product revenue | 26.6 |
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| 11.5 |
| ||
Contract and other revenue | 13.9 |
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| 11.6 |
| ||
Total revenue | $ | 59.9 |
|
| $ | 68.5 |
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Total operating costs and expenses | $ | 73.1 |
|
| $ | 72.8 |
|
Operating loss | $ | (13.2) |
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| $ | (4.2) |
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Operating margin | (22) | % |
| (6) | % | ||
Net loss | $ | (9.5) |
|
| $ | (2.0) |
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| Diluted net loss per share | $ | (0.09) |
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| $ | (0.02) |
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| Net cash provided by operating activities | $ | 35.4 |
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| $ | 35.1 |
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| Quarterly Financial Review - Non-GAAP (including operational metric) (1) | Three Months Ended
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| (In millions) | 2019 |
| 2018 | ||||
| Licensing billings (2) | $ | 63.8 |
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| $ | 76.7 |
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| Product revenue | $ | 26.6 |
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| $ | 11.5 |
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| Contract and other revenue | $ | 13.9 |
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| $ | 11.6 |
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| Total operating costs and expenses | $ | 62.3 |
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| $ | 61.6 |
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| Interest and other income (expense), net | $ | 1.0 |
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| $ | (0.5) |
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| Diluted share count | 115 |
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| 110 |
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| (1) | See "Supplemental Reconciliation of GAAP to Non-GAAP Results" table included below. Note that the applicable non-GAAP measures are presented and that revenue is solely presented on a GAAP basis. |
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| (2) | Licensing billings is an operational metric that reflects amounts invoiced to our licensing customers during the period, as adjusted for certain differences. |
