Rambus(US:RMBS)2025-07-29 20:05PART I Item 1. Financial Statements (Unaudited): Rambus Inc.'s unaudited financial statements detail its financial position, operations, and cash flows, reflecting significant growth in assets, revenue, and net income Condensed Consolidated Balance Sheets The balance sheet shows total assets increased to $1.47 billion as of June 30, 2025, primarily due to marketable securities, alongside growth in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $87,759 | $99,775 | | Marketable securities | $507,066 | $382,023 | | Total current assets | $783,757 | $690,257 | | Total assets | $1,467,811 | $1,343,136 | | Liabilities & Equity | | | | Total current liabilities | $72,228 | $81,812 | | Total liabilities | $239,831 | $222,444 | | Total stockholders' equity | $1,227,980 | $1,120,692 | | Total liabilities and stockholders' equity | $1,467,811 | $1,343,136 | Condensed Consolidated Statements of Income Rambus reported strong Q2 2025 and six-month financial results, with total revenue reaching $338.9 million and net income $118.2 million, driven by product and royalty growth Statement of Income Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Product revenue | $81,325 | $56,692 | $157,634 | $107,052 | | Royalties | $68,607 | $56,380 | $142,582 | $103,856 | | Total revenue | $172,209 | $132,138 | $338,873 | $250,009 | | Gross profit | $137,439 | $105,307 | $271,261 | $199,519 | | Operating income | $62,993 | $40,322 | $126,137 | $70,453 | | Net income | $57,935 | $36,056 | $118,238 | $68,954 | | Diluted EPS | $0.53 | $0.33 | $1.09 | $0.63 | Condensed Consolidated Statements of Cash Flows Net cash from operations significantly increased to $171.8 million for the six months ended June 30, 2025, while cash was used for investments and financing activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $171,773 | $109,541 | | Net cash provided by (used in) investing activities | ($139,587) | $30,772 | | Net cash used in financing activities | ($44,750) | ($110,052) | | Net (decrease) increase in cash and cash equivalents | ($12,016) | $29,811 | Notes to Unaudited Condensed Consolidated Financial Statements Key notes detail the company's single operating segment, significant customer concentration, revenue recognition, share repurchases, and a material South Korean tax refund claim - The company operates as a single reportable segment in the semiconductor space, with the CEO acting as the Chief Operating Decision Maker (CODM)40 - Revenue is highly concentrated, with the top five customers accounting for 68% and 69% of total revenue for the three and six months ended June 30, 2025, respectively110 - The company has filed refund claims for $82.7 million in South Korean withholding taxes and intends to file for an additional $32.2 million8082 - A long-term tax receivable of $114.9 million and a corresponding long-term tax payable have been recorded as of June 30, 20258082 - During the six months ended June 30, 2025, the company repurchased 0.1 million shares for approximately $5.8 million under its 2020 Repurchase Program69 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q2 2025 results to increasing demand for memory interface chips, driving record product revenue and overall revenue growth, while maintaining a strong liquidity position Business Overview and Strategy Rambus is a global semiconductor company focused on memory and security solutions for data center and AI, aiming to address the 'memory wall' bottleneck through strategic product focus and operational optimization - Rambus is a global semiconductor company focused on memory and security solutions for the data center and artificial intelligence (AI) markets91 - The company aims to solve the "memory wall" performance bottleneck created by the explosion of data-intensive workloads from generative AI, LLMs, and HPC9394 - Strategic objectives include focusing the product portfolio on semiconductors, optimizing operational efficiency, and reinvesting strong cash generation for growth95 Results of Operations Total revenue for the six months ended June 30, 2025, increased 35.6% to $338.9 million, driven by strong product revenue and royalties, while operating expenses also rose due to headcount growth Revenue Comparison (in millions) | Revenue Type | Six Months 2025 | Six Months 2024 | % Change | | :--- | :--- | :--- | :--- | | Product revenue | $157.6 | $107.1 | 47.2% | | Royalties | $142.6 | $103.9 | 37.2% | | Contract and other revenue | $38.7 | $39.0 | (0.8)% | | Total revenue | $338.9 | $250.0 | 35.6% | - The increase in product revenue was primarily due to higher sales of memory interface chips115 - The increase in royalties was primarily due to the timing and structure of license agreements and renewals117 - Increases in R&D and SG&A expenses were primarily driven by higher payroll-related costs and stock-based compensation due to headcount growth128133 Liquidity and Capital Resources As of June 30, 2025, the company maintained a strong liquidity position with $594.8 million in cash and marketable securities, generating $171.8 million in operating cash flow Key Liquidity Metrics (in millions) | Metric | As of June 30, 2025 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $87.7 | $99.8 | | Marketable securities | $507.1 | $382.0 | | Total cash, cash equivalents and marketable securities | $594.8 | $481.8 | - Net cash provided by operating activities for the six months ended June 30, 2025, was $171.8 million, compared to $109.5 million for the same period in 2024154155 - During the six months ended June 30, 2025, the company repurchased 0.1 million shares for approximately $5.8 million163 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuation on its $535.8 million investment portfolio, with foreign currency exposure deemed immaterial for hedging - The primary market risk is interest rate fluctuation on the investment portfolio of $535.8 million in fixed income marketable securities170 - A 1.0% increase in interest rates would lead to an estimated $2.9 million decline in the fair value of the investment portfolio170 - Foreign currency exposure is monitored but considered not material enough to warrant hedging as of June 30, 2025171 Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective174 - No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2025175 PART II Item 1. Legal Proceedings Rambus is not currently a party to any material pending legal proceedings, anticipating no material adverse effects from ordinary course matters - The company is not currently a party to any material pending legal proceedings177 Item 1A. Risk Factors The company faces numerous risks, including industry cyclicality, customer concentration, supply chain reliance, product failures, cybersecurity threats, and international operational challenges - The business is subject to risks from operating in the highly cyclical and competitive electronics industry180 - A high degree of revenue concentration exists, with the top five customers representing approximately 69% of consolidated revenue for the first six months of 2025186 - The company relies on third parties for manufacturing and is exposed to supply chain risks, including delays, capacity constraints, and geopolitical uncertainty225 - Cybersecurity breaches and incidents pose a significant threat to the company's information technology systems and intellectual property233 - A substantial portion of revenue (82% for H1 2025) is from international customers, exposing the company to risks related to trade restrictions, tariffs, and geopolitical instability215 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Rambus repurchased common stock under its 2020 Share Repurchase Program during Q2 2025, with 5.6 million shares remaining authorized for repurchase Share Repurchases for Q2 2025 | Period | Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | May 1 - May 31, 2025 | 37,090 | $52.62 | | June 1 - June 30, 2025 | 29,443 | $57.79 | - As of June 30, 2025, there was an outstanding authorization to repurchase approximately 5.6 million shares under the 2020 Repurchase Program297 Item 5. Other Information Director Meera Rao and CFO Desmond M. Lynch adopted Rule 10b5-1 trading plans during Q2 2025 for the sale of company shares - Director Meera Rao and CFO Desmond M. Lynch adopted Rule 10b5-1 trading plans during Q2 2025301302 Item 6. Exhibits The report includes required exhibits, such as CEO and CFO certifications and Inline XBRL data files - Key exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (Exhibits 101, 104)303