Rambus Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached a record $218.3 million, a 22% increase year-over-year compared to $178.5 million in Q3 2025, exceeding the guidance range of $210 million to $216 million.
• Product revenue was $114.3 million, up 15% quarter-over-quarter and 22% year-over-year from $93.3 million.
• Royalties revenue was $77.0 million, up from $65.1 million in the prior year period.
• Contract and other revenue was $27.0 million, up from $20.1 million in the prior year period.
• GAAP diluted earnings per share (EPS) were $0.69, compared to $0.44 in Q3 2025.
• Non-GAAP diluted EPS were $0.84, compared to $0.62 in Q3 2025.
• GAAP operating income was $83.6 million with an operating margin of 38%, compared to $63.3 million and 35% in the prior year.
• Non-GAAP operating income was $102.2 million with an operating margin of 47%, compared to $79.2 million and 44% in the prior year.
• GAAP net income was $74.6 million, compared to $48.4 million in Q3 2025.
• Non-GAAP net income was $91.7 million, compared to $68.2 million in Q3 2025.
• Cash from operating activities was a record $102.5 million.
• Cash, cash equivalents, and marketable securities totaled $776.9 million as of September 30, 2026, a decrease of $48.0 million from June 30, 2026.
• Deferred revenue was $32.4 million as of September 30, 2026, up from $30.0 million as of December 31, 2025.
• Inventories increased to $87.2 million as of September 30, 2026, from $44.1 million as of December 31, 2025.

Guidance and Future Outlook:

• For Q4 2026, the Company expects revenue between $227 million and $233 million.
• Product revenue is expected to be between $127 million and $133 million.
• Royalties revenue is expected to be between $68 million and $74 million.
• Contract and other revenue is expected to be between $26 million and $32 million.
• GAAP diluted EPS is expected to be between $0.68 and $0.76.
• Non-GAAP diluted EPS is expected to be between $0.84 and $0.92.
• GAAP total operating costs and expenses are expected to be between $139 million and $143 million.
• Non-GAAP total operating costs and expenses are expected to be between $120 million and $124 million.
• The outlook assumes a GAAP tax rate of 17.5%, a non-GAAP tax rate of 16%, and a diluted share count of 109 million shares.
• Management expects an even stronger performance in Q4 driven by accelerating demand for differentiated solutions.

Business Segments and Product Lines:

• The Company expanded product and IP offerings for next-generation AI systems.
• New offerings include an industry-leading PMIC for LPDDR6 SOCAMM2.
• New offerings include data center-class Root of Trust security IP.
• Management cited strong customer demand driving record product revenue.

Market and Competitive Landscape:

• The Company focuses on data center and AI infrastructure, addressing bottlenecks between memory and processing.
• Management noted growing performance requirements for next-generation AI and data center infrastructure.
• The Company describes its solutions as differentiated, enabling greater bandwidth, efficiency, and security.

Risks and Challenges:

• Achieving the Q4 revenue range requires the Company to sign customer agreements for various product sales and solutions licensing.
• Revenue is not without risk.
• Actual results may differ materially from forward-looking statements due to market challenges and other risks described in periodic SEC reports.

Management Commentary and Tone:

• Luc Seraphin, President and CEO, stated the Company delivered record quarterly revenue and earnings that exceeded guidance.
• Management expressed confidence in ongoing execution on the roadmap and accelerating demand.
• The tone indicates a focus on delivering long-term profitable growth and value for stockholders.

Other Key Points:

• The Company paid $135.4 million for repurchases of common stock during the quarter.
• The Company paid $11.2 million for capital expenditures during the quarter.
• GAAP cost of revenue was $47.4 million; non-GAAP cost of revenue was $46.1 million.
• GAAP total operating expenses were $87.3 million; non-GAAP total operating expenses were $70.0 million.
• Restructuring charges of $0.2 million were recorded in the quarter.
• Facility closure costs of $0.1 million were recorded in the quarter.
• The Company expects interest and other income to be $6.5 million in Q4 2026.
• Stock-based compensation expense excluded from non-GAAP measures was $17.1 million for the quarter.
• Amortization of acquired intangible assets was $1.2 million for the quarter.