Rambus(RMBS) Huachuang Securities·2024-08-04 12:31Investment Rating - The report assigns a positive outlook for Rambus, indicating expectations for revenue growth in the upcoming quarters, particularly driven by strong product performance and market demand for DDR5 technology [2][12]. Core Insights - Rambus reported total revenue of $132.1 million for Q2 FY2024, a year-over-year increase of 10.3% from $119.8 million in the same quarter last year, primarily driven by strong demand in high-value memory products [5][17]. - The company experienced significant growth in operating profit, which reached $40.3 million, up 244.4% from $11.7 million in the previous year, resulting in an operating margin of 31% compared to 10% last year [5][17]. - Despite the overall revenue growth, net income decreased by 78.6% to $36.1 million from $168.9 million in the previous year, attributed to various factors including changes in revenue recognition [5][17]. Revenue Breakdown Product Revenue - Product revenue amounted to $56.7 million, a 3.1% increase year-over-year, driven mainly by DDR5 technology [8][17]. Royalty Revenue - Royalty revenue was $56.4 million, up 38.6% from $40.7 million in the previous year, with licensing fees at $61.5 million, reflecting a 2.2% increase [9][17]. Contract and Other Revenue - Contract and other revenue decreased by 21.2% to $1.9 million, primarily consisting of silicon IP, which is expected to grow due to increasing demand driven by AI applications [11][17]. Q3 FY2024 Guidance - Rambus anticipates Q3 FY2024 revenue to be between $144 million and $150 million, with royalty income projected between $59 million and $65 million, and licensing fees expected between $60 million and $66 million [12][17]. - Product revenue is expected to be between $62 million and $68 million, with a forecast of double-digit growth both sequentially and year-over-year [12][17]. Market Position and Future Outlook - Rambus is well-positioned in the DDR5 market, with ongoing developments in high-performance memory solutions and a strong focus on AI-driven applications [13][15]. - The company is expanding its market opportunities through strategic investments in innovative products, particularly in the areas of power management integrated circuits (PMICs) and silicon IP solutions [14][15].