Rambus Inc. (RMBS) Bundle
A Brief History of Rambus Inc.
Rambus Inc. has undergone significant transformations since its inception, evolving from a technology licensing company into a key player in the semiconductor industry. The company's focus on memory and security technologies has led to substantial growth and strategic partnerships.
Financial Performance Overview
As of September 30, 2024, Rambus reported a total revenue of $145.5 million for the third quarter, reflecting a 38.2% increase compared to $105.3 million for the same quarter in 2023. For the nine months ended September 30, 2024, total revenue reached $395.5 million, up from $338.9 million in 2023, marking a 16.7% growth.
| Period | Revenue (in millions) | Growth Rate |
|---|---|---|
| Q3 2024 | $145.5 | 38.2% |
| Q3 2023 | $105.3 | - |
| 9M 2024 | $395.5 | 16.7% |
| 9M 2023 | $338.9 | - |
Net Income and Earnings per Share
Rambus reported a net income of $48.7 million for Q3 2024, compared to $103.2 million in Q3 2023. The net income for the nine months ended September 30, 2024, was $117.6 million, down from $275.4 million in the same period of 2023. The diluted net income per share for Q3 2024 was $0.45, compared to $0.93 for Q3 2023.
| Period | Net Income (in millions) | EPS (Diluted) |
|---|---|---|
| Q3 2024 | $48.7 | $0.45 |
| Q3 2023 | $103.2 | $0.93 |
| 9M 2024 | $117.6 | $1.08 |
| 9M 2023 | $275.4 | $2.48 |
Expense Breakdown
For the nine months ended September 30, 2024, Rambus reported total research and development expenses of $119.2 million, slightly down from $120.8 million in 2023. The company saw an increase in prototyping costs and stock-based compensation, offset by reductions in consulting and EDA tool subscription expenses.
| Expense Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Research and Development | $119.2 | $120.8 |
| Sales, General and Administrative | $72.8 | $79.2 |
Cash and Marketable Securities
As of September 30, 2024, Rambus had cash and cash equivalents of $114.0 million and marketable securities totaling $318.7 million, bringing the total cash, cash equivalents, and marketable securities to $432.7 million, compared to $425.8 million at the end of 2023.
| Category | September 30, 2024 (in millions) | December 31, 2023 (in millions) |
|---|---|---|
| Cash and Cash Equivalents | $114.0 | $94.8 |
| Marketable Securities | $318.7 | $331.0 |
| Total | $432.7 | $425.8 |
Market Position and Future Outlook
Rambus continues to strengthen its market position through strategic partnerships and an expanding portfolio of patented technologies. As of September 30, 2024, the company holds 2,241 patents and has 522 patent applications pending globally. The outlook remains positive as Rambus aims to leverage its technological advancements to drive future growth.
A Who Owns Rambus Inc. (RMBS)
Shareholder Structure
As of 2024, Rambus Inc. (RMBS) has a diverse shareholder structure, including institutional investors, retail investors, and company insiders. The following table summarizes the major shareholders:
| Shareholder | Type | Percentage of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | Institutional Investor | 10.5% |
| BlackRock, Inc. | Institutional Investor | 9.8% |
| State Street Corporation | Institutional Investor | 7.2% |
| FMR LLC (Fidelity) | Institutional Investor | 5.6% |
| Insider Holdings | Insider | 3.1% |
| Other Institutional Investors | Institutional Investor | 18.0% |
| Retail Investors | Retail | 45.8% |
Recent Stock Performance
The stock performance of Rambus Inc. has shown notable trends in 2024. As of September 30, 2024, the following financial metrics were reported:
| Metric | Value |
|---|---|
| Stock Price (as of September 30, 2024) | $39.67 |
| Market Capitalization | $4.22 billion |
| 52-Week High | $65.00 |
| 52-Week Low | $28.89 |
Recent Financial Highlights
For the three months ended September 30, 2024, Rambus reported the following financial results:
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $145.5 million | $105.3 million |
| Net Income | $48.7 million | $103.2 million |
| Basic Earnings per Share | $0.45 | $0.95 |
| Diluted Earnings per Share | $0.45 | $0.93 |
Ownership Changes and Trends
Rambus has been actively managing its share repurchase program, as illustrated in the following table:
| Period | Total Shares Purchased | Average Price Paid per Share | Cumulative Shares Repurchased |
|---|---|---|---|
| 2023 (Cumulative) | 12,120,419 | $28.89 | 12,120,419 |
| February 1 - February 29, 2024 | 11,284 | $54.73 | 12,131,703 |
| March 1 - March 31, 2024 | 805,340 | $62.09 | 12,937,043 |
| April 1 - April 30, 2024 | 94,431 | $49.86 | 13,031,474 |
| May 1 - May 31, 2024 | 126,305 | $61.69 | 13,157,779 |
| July 1 - July 31, 2024 | 10,328 | $58.09 | 13,168,107 |
| August 1 - August 31, 2024 | 700,694 | $44.37 | 13,868,801 |
| September 1 - September 30, 2024 | 461,632 | $39.67 | 14,330,433 |
Insider Ownership
As of September 30, 2024, insider ownership is composed of key executives and board members, as detailed in the following table:
| Name | Position | Shares Owned |
|---|---|---|
| Luc Seraphin | CEO | 1,200,000 |
| Mark Horowitz | Chairman | 400,000 |
| Other Executives | Various | 500,000 |
Rambus Inc. (RMBS) Mission Statement
Overview of Mission Statement
Rambus Inc. aims to be a leader in semiconductor technology, focused on enhancing the performance and security of data-centric applications. The mission highlights innovation in memory subsystems, providing solutions that meet the increasing demands for data throughput and integrity across various platforms, including cloud and edge computing.
Strategic Objectives
The strategic objectives include:
- Focusing Product Portfolio: Concentrating on core strengths in semiconductors.
- Optimizing Operational Efficiency: Improving processes to enhance profitability.
- Leveraging Cash Generation: Reinvesting profits to foster growth.
- Maximizing Synergies: Utilizing overlaps across customer bases and partnerships.
Financial Performance Indicators
As of September 30, 2024, Rambus reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $145.5 million | $105.3 million | 38.2% |
| Product Revenue | $66.4 million | $52.2 million | 27.2% |
| Royalty Revenue | $64.1 million | $28.9 million | 122.1% |
| Contract and Other Revenue | $15.0 million | $24.2 million | (38.1)% |
| Net Income | $48.7 million | $103.2 million | (52.8)% |
Revenue Breakdown
Revenue sources are categorized into three main segments: product revenue, royalties, and contract revenue. The following table illustrates the revenue distribution across these segments for Q3 2024:
| Segment | Q3 2024 Revenue | Percentage of Total Revenue |
|---|---|---|
| Product Revenue | $66.4 million | 46% |
| Royalties | $64.1 million | 44% |
| Contract Revenue | $15.0 million | 10% |
Research and Development Investments
Investments in research and development (R&D) are essential for Rambus's mission of innovation. The company reported R&D expenses of:
| Period | R&D Expenses (in millions) |
|---|---|
| Q3 2024 | $41.3 million |
| Q3 2023 | $37.4 million |
Intellectual Property Portfolio
As of September 30, 2024, Rambus holds:
- 2,241 U.S. and foreign patents.
- 522 patent applications pending in various countries.
Customer Concentration and Revenue Sources
The company has a significant customer concentration, with top customers accounting for approximately 69% of total revenue for Q3 2024. The major customers are detailed below:
| Customer | Percentage of Revenue |
|---|---|
| Customer A | 21% |
| Customer B | 21% |
| Customer C | 10% |
| Customer D | 14% |
Geographic Revenue Distribution
Revenue from international customers remains significant, constituting approximately 68% of total revenue. The geographic revenue distribution for Q3 2024 is as follows:
| Region | Revenue (in thousands) |
|---|---|
| USA | $46,315 |
| South Korea | $56,129 |
| Singapore | $21,082 |
| Other | $21,987 |
Summary of Recent Developments
In recent quarters, Rambus has focused on enhancing its technology offerings, with notable advancements including:
- Launch of the DDR5 Client Clock Driver.
- Completion of an accelerated share repurchase program, acquiring approximately 14.3 million shares by September 30, 2024.
How Rambus Inc. (RMBS) Works
Company Overview
Rambus Inc. focuses on advanced semiconductor design, specializing in high-performance memory subsystems and security solutions. The company operates in various segments, generating revenue from product sales, royalties from patent licenses, and contract services.
Financial Performance (2024)
For the three months ended September 30, 2024, Rambus reported:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $145.5 million | $105.3 million | 38.2% |
| Net Income | $48.7 million | $103.2 million | -52.8% |
| Basic EPS | $0.45 | $0.95 | -52.6% |
| Diluted EPS | $0.45 | $0.93 | -51.6% |
Revenue Breakdown
Rambus’s revenue sources for the three months ended September 30, 2024, were as follows:
| Revenue Source | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Product Revenue | $66.4 million | $52.2 million | 27.2% |
| Royalties | $64.1 million | $28.9 million | 122.1% |
| Contract and Other Revenue | $15.0 million | $24.2 million | -38.1% |
Cost of Revenue
For the three months ended September 30, 2024, the cost of revenue was as follows:
| Cost Item | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Cost of Product Revenue | $24.6 million | $19.4 million | 26.6% |
| Cost of Contract and Other Revenue | $0.8 million | $1.3 million | -41.9% |
Operating Expenses
Rambus's operating expenses for the three months ended September 30, 2024, are detailed below:
| Expense Category | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Research and Development | $41.3 million | $37.4 million | 10.5% |
| Sales, General and Administrative | $21.4 million | $20.8 million | 2.9% |
Cash Flow Analysis
For the nine months ended September 30, 2024, Rambus reported the following cash flows:
| Cash Flow Category | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $171.6 million | $140.9 million |
| Net Cash Provided by Investing Activities | $13.0 million | $30.9 million |
| Net Cash Used in Financing Activities | ($165.3 million) | ($165.4 million) |
Intellectual Property
As of September 30, 2024, Rambus holds:
- 2,241 U.S. and foreign patents
- 522 pending patent applications
Contractual Obligations and Share Repurchase Program
As of September 30, 2024, Rambus's material contractual obligations are summarized below:
| Obligation Type | Total | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Software Licenses | $13.0 million | $4.0 million | $8.5 million | $0.4 million |
| Other Obligations | $0.3 million | $0.03 million | $0.1 million | $0.1 million |
| Acquisition Retention Bonuses | $0.3 million | $0 million | $0.3 million | $0 million |
Rambus's share repurchase program, initiated in October 2020, allows for the repurchase of up to 20 million shares. As of September 30, 2024, cumulative shares repurchased totaled approximately 14.3 million.
How Rambus Inc. (RMBS) Makes Money
Revenue Sources
Rambus Inc. generates revenue from three primary sources: product revenue, royalties, and contract and other revenue. As of September 30, 2024, the breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Percentage Change |
|---|---|---|---|
| Product Revenue | $66.4 | $52.2 | 27.2% |
| Royalties | $64.1 | $28.9 | 122.1% |
| Contract and Other Revenue | $15.0 | $24.2 | (38.1%) |
| Total Revenue | $145.5 | $105.3 | 38.2% |
Product Revenue
Product revenue primarily consists of sales from memory interface chips, which are sold to major DRAM manufacturers and cloud providers. For the nine months ended September 30, 2024, product revenue totaled $173.4 million, reflecting a slight increase of 1.5% from $170.9 million in the same period in 2023. This growth is attributed to increased sales volume and demand for their memory products.
Royalty Revenue
Royalty revenue is derived from licensing agreements related to Rambus's extensive patent portfolio. The royalty revenue for Q3 2024 was $64.1 million, significantly up from $28.9 million in Q3 2023. For the nine months ended September 30, 2024, royalty revenue reached $168.0 million, up from $97.7 million in the same period in 2023. The increase is largely due to new licensing agreements and renewals, reflecting a strong market position in semiconductor technologies.
Contract and Other Revenue
Contract and other revenue, which includes technology development projects and engineering services, totaled $15.0 million in Q3 2024, down from $24.2 million in Q3 2023. For the nine months ended September 30, 2024, this category generated $54.1 million, a decrease from $70.3 million in the same period last year. The decline is primarily due to the sale of the PHY IP group in 2023, which impacted revenue from technology development contracts.
Cost Structure
The cost of revenue for Rambus includes costs associated with product sales and contract services. For Q3 2024, total cost of revenue was $28.1 million, with the following breakdown:
| Cost Category | Q3 2024 Cost (in millions) | Q3 2023 Cost (in millions) | Percentage Change |
|---|---|---|---|
| Cost of Product Revenue | $24.6 | $19.4 | 26.6% |
| Cost of Contract and Other Revenue | $0.8 | $1.3 | (41.9%) |
| Amortization of Acquired Intangible Assets | $2.8 | $3.3 | (16.5%) |
| Total Cost of Revenue | $28.1 | $24.0 | 13.5% |
Operating Expenses
Operating expenses include research and development (R&D) and sales, general and administrative expenses. For Q3 2024, the operating expenses were:
| Expense Category | Q3 2024 Expense (in millions) | Q3 2023 Expense (in millions) | Percentage Change |
|---|---|---|---|
| Research and Development | $41.3 | $37.4 | 10.5% |
| Sales, General and Administrative | $25.9 | $25.3 | 2.4% |
| Total Operating Expenses | $62.7 | $62.7 | 0.0% |
Net Income
Rambus's net income for Q3 2024 was $48.7 million, compared to $103.2 million in Q3 2023. For the nine months ending September 30, 2024, the net income was $117.6 million, down from $275.4 million in the same period in 2023. The decline in net income can be attributed to increased operating expenses and the absence of gains from divestitures seen in the previous year.
Cash Flow and Financial Stability
As of September 30, 2024, Rambus reported cash and cash equivalents totaling $113.9 million, with marketable securities amounting to $318.7 million. The company generated $171.6 million in cash from operating activities for the nine months ended September 30, 2024, reflecting strong operational efficiency and cash generation capabilities.
Intellectual Property Portfolio
Rambus holds 2,241 patents, with 522 applications pending in various jurisdictions. The company's extensive IP portfolio underpins its revenue from royalties and enhances its competitive edge in the semiconductor industry.
Customer Concentration
The top five customers of Rambus accounted for approximately 69% of total revenue for Q3 2024, indicating a high level of customer concentration which can impact revenue stability. The majority of revenue comes from international customers, representing approximately 68% of total revenue for Q3 2024.
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Article updated on 8 Nov 2024
Resources:
- Rambus Inc. (RMBS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Rambus Inc. (RMBS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Rambus Inc. (RMBS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.