RAMBUS INC
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
RMBS$74.53+7.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0000917273-24-000107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0000917273-25-000075
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 104 current paragraphs.
46 unchanged; 42 reworded; 15 added; 29 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Rambus is a global semiconductor company dedicated to enabling the future of the data center and artificial intelligence (“AI”) by delivering innovative memory and security solutions that address the evolving needs of the technology industry.
Current report
As a pioneer with 35 years of advanced semiconductor design experience, Rambus is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of accelerating and securing data movement in the data center, edge, and client markets. We are a leader in high-performance memory subsystems, offering a balanced and diverse portfolio of products encompassing chips and silicon IP. Focusing primarily on the data center, our innovative solutions maximize performance and security in computationally intensive systems.
Current report
The explosion of data-intensive workloads, driven by the proliferation of generative AI, large language models (“LLMs”), and high-performance computing (“HPC”), is placing unprecedented demands on computing infrastructure. This surge in data processing is exacerbating the performance gap between processors and memory, creating a critical bottleneck—the “memory wall”—that limits overall system efficiency. As processors and accelerators rapidly increase in speed and core count, memory bandwidth and latency must keep pace to unlock their full potential.
Current report
Rambus is uniquely positioned to address this challenge. Our deep expertise in memory technologies and innovative architectures enables us to deliver solutions that break through the memory wall. We provide industry-leading memory interface chips that enable the highest bandwidth and capacity server memory modules, maximizing memory performance for the most demanding data-intensive workloads. These solutions are essential for supporting the training and inference of increasingly complex AI models, including those used in generative AI applications.
Current report
•Revenue of $166.7 million;
Current report
•Operating expenses of $70.7 million; and
Current report
•Net cash provided by operating activities of $77.4 million.
Current report
We delivered record quarterly product revenue of $76.3 million in the first quarter of 2025, which increased by approximately 52% as compared to the same period in 2024. We continued our market leadership in core DDR5 chip products and experienced growth in revenue from new products.
Current report
Total research and development expenses for the three months ended March 31, 2025 increased approximately $5.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $4.6 million and stock-based compensation expenses of $1.1 million, both driven primarily by headcount growth, offset by a decrease in prototyping costs of $1.1 million.
Current report
Total sales, general and administrative expenses for the three months ended March 31, 2025 increased approximately $2.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $1.2 million and stock-based compensation expenses of $0.8 million, both driven primarily by headcount growth.
Current report
Contract and other revenue consist of revenue from technology development projects. Contract and other revenue decreased approximately $3.6 million for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily due to lower revenue associated with our Silicon IP offerings.
Current report
Total research and development expenses for the three months ended March 31, 2025 increased approximately $5.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $4.6 million and stock-based compensation expenses of $1.1 million, both driven primarily by headcount growth, offset by a decrease in prototyping costs of $1.1 million.
Current report
Total sales, general and administrative expenses for the three months ended March 31, 2025 increased approximately $2.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $1.2 million and stock-based compensation expenses of $0.8 million, both driven primarily by headcount growth.
Current report
Provision for Income Taxes
Current report
During the three months ended March 31, 2024, we repurchased approximately 0.8 million shares for approximately $50.8 million under the 2020 Repurchase Program, which were retired and recorded as a reduction to stockholders’ equity.
Removed paragraphs (29)
Previous report
We are an industry-leading provider of chips, silicon IP and innovations that address the fundamental challenges of accelerating data and enabling critical performance improvements for data center and other growing markets. The ongoing growth of the cloud, along with the widespread advancement of artificial intelligence (“AI”) and other data-intensive workloads, continue to drive an exponential increase in data usage and demands on data infrastructure. Creating fast and safe connections, both in and across systems, remains one of the most mission-critical design challenges limiting performance in advanced hardware for these markets.
Previous report
As an industry pioneer with over 30 years of advanced semiconductor design experience, we are ideally positioned to address the challenges of moving and protecting data. We are a leader in high-performance memory subsystems, providing chips, silicon IP and innovations that maximize the performance and security in computationally intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Our products and innovations deliver the increased bandwidth, capacity and security required to meet the world’s data needs and drive ever-greater end-user experiences.
Previous report
•Revenue of $145.5 million;
Previous report
•Operating expenses of $62.7 million; and
Previous report
•Net cash provided by operating activities of $62.1 million.
Previous report
Cost of contract and other revenue decreased approximately $0.5 million for the three months ended September 30, 2024 as compared to the same period in 2023. Cost of contract and other revenue decreased approximately $2.0 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The decreases in both periods were primarily due to lower engineering services associated with the contracts.
Previous report
Total research and development expenses for the three months ended September 30, 2024 increased approximately $3.9 million as compared to the same period in 2023, primarily due to increases in prototyping costs of $2.0 million, stock-based compensation expenses of $1.3 million, headcount-related expenses of $0.8 million and facility expenses of $0.6 million, offset by a decrease in software EDA tool subscriptions of $1.1 million. Total research and development expenses for the nine months ended September 30, 2024 decreased approximately $1.6 million as compared to the same period in 2023, primarily due to decreases in software EDA tool subscriptions of $4.7 million, consulting expenses of $1.6 million, headcount-related expenses of $1.4 million, depreciation expense of $0.7 million and retention bonus expense related to acquisitions of $0.6 million, offset by increases in prototyping costs of $3.4 million, lower engineering costs allocated to cost of revenue of $2.0 million, facility costs of $1.9 million and stock-based compensation expenses of $0.7 million. The fluctuations in both periods are primarily driven by growth in our research and development initiatives, offset by decreases attributable to the sale of our PHY IP group in the third quarter of 2023.
Previous report
Total sales, general and administrative expenses for the three months ended September 30, 2024 increased approximately $0.6 million as compared to the same period in 2023, primarily due to increases in consulting expenses of $0.7 million, stock-based compensation expenses of $0.7 million and headcount-related expenses of $0.5 million, offset by decreases in rent and facility expenses of $0.8 million and sales and marketing activities of $0.8 million. Total sales, general and administrative expenses for the nine months ended September 30, 2024 decreased approximately $6.4 million as compared to the same period in 2023, primarily due to decreases in rent and facility expenses of $3.3 million, stock-based compensation expenses of $1.9 million, sales and marketing activities of $0.7 million and headcount-related costs of $0.5 million, offset by increases in consulting expenses of $1.0 million and acquisition-related costs of $0.8 million.
Previous report
Product revenue consists of revenue from the sale of memory and security products.
Previous report
Contract and other revenue consist of revenue from technology development projects. Contract and other revenue decreased approximately $9.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. Contract and other revenue decreased approximately $16.2 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The decreases for both the three and nine months ended September 30, 2024 as compared to the same periods in 2023 were primarily attributed to the sale of our PHY IP group in the third quarter of 2023.
Previous report
Total research and development expenses for the three months ended September 30, 2024 increased approximately $3.9 million as compared to the same period in 2023, primarily due to increases in prototyping costs of $2.0 million, stock-based compensation expenses of $1.3 million, headcount-related expenses of $0.8 million and facility expenses of $0.6 million, offset by a decrease in software EDA tool subscriptions of $1.1 million.
Previous report
Total research and development expenses for the nine months ended September 30, 2024 decreased approximately $1.6 million as compared to the same period in 2023, primarily due to decreases in software EDA tool subscriptions of $4.7 million, consulting expenses of $1.6 million, headcount-related expenses of $1.4 million, depreciation expense of $0.7 million and retention bonus expense related to acquisitions of $0.6 million, offset by increases in prototyping costs of $3.4 million, lower engineering costs allocated to cost of revenue of $2.0 million, facility costs of $1.9 million and stock-based compensation expenses of $0.7 million. The fluctuations in both periods are primarily driven by growth in our research and development initiatives, offset by decreases attributable to the sale of our PHY IP group in the third quarter of 2023.
Previous report
Total sales, general and administrative expenses for the three months ended September 30, 2024 increased approximately $0.6 million as compared to the same period in 2023, primarily due to increases in consulting expenses of $0.7 million, stock-based compensation expenses of $0.7 million and headcount-related expenses of $0.5 million, offset by decreases in rent and facility expenses of $0.8 million and sales and marketing activities of $0.8 million.
Previous report
Total sales, general and administrative expenses for the nine months ended September 30, 2024 decreased approximately $6.4 million as compared to the same period in 2023, primarily due to decreases in rent and facility expenses of $3.3 million, stock-based compensation expenses of $1.9 million, sales and marketing activities of $0.7 million and headcount-related costs of $0.5 million, offset by increases in consulting expenses of $1.0 million and acquisition-related costs of $0.8 million.
Previous report
Restructuring and Other Charges (Recoveries)
Previous report
In June 2023, we initiated a restructuring program to reduce overall expenses to improve future profitability by reducing our overall spending (the “2023 Restructuring Plan”). In connection with this restructuring program, we initiated a plan resulting in a reduction of 42 employees. During the nine months ended September 30, 2023, we recorded charges of approximately $9.4 million, which included an immaterial recovery of costs during the three months ended September 30, 2023, related to the reduction in workforce, as well as write-downs of obligations related to certain IP development costs and software licenses for engineering development tools. The 2023 Restructuring Plan was substantially completed in the fourth quarter of 2023. Refer to Note 16, “Restructuring and Other Charges” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for additional information.
Previous report
During the nine months ended September 30, 2024, we did not initiate any restructuring programs.
Previous report
Gain on Divestiture
Previous report
In July 2023, we entered into an asset purchase agreement (the “Purchase Agreement”) with Cadence Design Systems, Inc. (the “Purchaser”), pursuant to which we agreed to sell certain assets and the Purchaser agreed to assume certain liabilities from us, in each case with respect to our PHY IP group. The decision to sell this portion of our business reflected the ongoing review of our core semiconductor business to focus on our development of digital IP and chips, including novel memory solutions for high-performance computing, to support the continued evolution of the data center and AI.
Previous report
Consequently, we recognized a gain of approximately $90.8 million during the three and nine months ended September 30, 2023. Refer to Note 17, “Divestiture,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for additional information.
Previous report
Impairment of Assets
Previous report
During the nine months ended September 30, 2024, we recorded a charge of approximately $1.1 million in our Unaudited Condensed Consolidated Statement of Operations of this Form 10-Q, related to the write-off of certain fixed assets no longer in use and for which we determined they had no alternate economic use.
Previous report
Concurrent with the sale of our PHY IP group to Cadence in the third quarter of 2023, we recorded a charge of approximately $10.0 million in our Unaudited Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2023. The charge was primarily related to the accelerated amortization of software licenses that were not part of the PHY IP disposal group, but where acceleration was warranted due to the lower headcount and corresponding excess capacity for such licenses. Refer to Note 17, “Divestiture,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for additional information.
Previous report
The $0.2 million loss on fair value adjustment of derivatives, net, related to the settlement of the remaining outstanding warrants in the first quarter of 2023.
Previous report
Provision for (Benefit from) Income Taxes
Previous report
We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative. The realizability of our net deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.
Previous report
On February 29, 2024, we entered into an accelerated share repurchase program with Royal Bank of Canada (“RBC”) (the “2024 ASR Program”). The 2024 ASR Program was part of the 2020 Repurchase Program. Under the 2024 ASR Program, we pre-paid to RBC the $50.0 million purchase price for our common stock and, in turn, we received an initial delivery of approximately 0.7 million shares of our common stock from RBC on March 1, 2024, which were retired and recorded as a $40.0 million reduction to stockholders’ equity. The remaining $10.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to our stock. On March 18, 2024, the accelerated share repurchase program was completed and we received an additional 0.1 million shares of our common stock, which were retired, as the final settlement of the 2024 ASR Program.
Previous report
On August 10, 2023, we entered into an accelerated share repurchase program with RBC (the “2023 ASR Program”). The 2023 ASR Program was part of the 2020 Repurchase Program. Under the 2023 ASR Program, we pre-paid to RBC the $100.0 million purchase price for our common stock and, in turn, we received an initial delivery of approximately 1.6 million shares of our common stock from RBC on August 11, 2023, which were retired and recorded as an $80.0 million reduction to stockholders’ equity. The remaining $20.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to our stock. On September 22, 2023, the accelerated share repurchase program was completed and we received an additional 0.2 million shares of our common stock, which were retired, as the final settlement of the 2023 ASR Program.
Previous report
Effective January 1, 2023, our share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. As of September 30, 2024, we recorded an immaterial excise tax liability on our accompanying Unaudited Condensed Consolidated Balance Sheet of this Form 10-Q.
Reworded paragraphs (42)
Previous wording
Our strategic objectives include focusing our product portfolio and research around our core strength in semiconductors, optimizing operational efficiency and leveraging strong cash generation to re-invest for growth. We continue to maximize synergies across our businesses and customer base, leveraging the significant overlap in our ecosystem of customers, partners and influencers. Our product and technology roadmap, as well as our go-to-market strategy, are driven by the application-specific requirements of our focus markets.
Current wording
Our strategic objectives include focusing our product portfolio and research around our core strength in semiconductors, optimizing operational efficiency and leveraging strong cash generation to reinvest for growth. We continue to maximize synergies across our businesses and customer base, leveraging the significant overlap in our ecosystem of customers, partners and influencers. Our product and technology roadmap, as well as our go-to-market strategy, are driven by the application-specific requirements of our focus markets.
Previous wording
We delivered strong results during the third quarter of 2024, driven by continued demand for our memory interface chips and stability from our royalty revenue. As part of the ongoing execution of our industry-leading product roadmap, we added the DDR5 Client Clock Driver to our product portfolio.
Current wording
Our continued execution delivered strong results during the first quarter of 2025, driven by continued demand for our memory interface chips and increases in our royalties revenue during the quarter.
Previous wording
Key third quarter 2024 financial results included:
Current wording
Key first quarter 2025 financial results included:
Previous wording
Product revenue consists primarily of memory interface chips. Our memory interface chips are sold directly and through distributors to major DRAM manufacturers, Micron, Samsung and SK hynix, as well as to system manufacturers and cloud providers, for integration into server memory modules. Product revenue accounted for 46% and 44% of our consolidated revenue for the three and nine months ended September 30, 2024, as compared to 50% for both the three and nine months ended September 30, 2023.
Current wording
Product revenue consists primarily of memory interface chips and is increasing in strategic significance. Our memory interface chips are sold to major DRAM manufacturers, Micron, Samsung and SK hynix, as well as directly to system manufacturers and cloud providers, for integration into server memory modules. Product revenue accounted for 46% of our consolidated revenue for the three months ended March 31, 2025, as compared to 43% for the three months ended March 31, 2024.
Previous wording
Royalty revenue is derived from our patent licenses, through which we provide our customers certain rights to our broad worldwide portfolio of patented inventions. Our patent licenses enable our customers to use a portion of our patent portfolio in their own digital electronics products. The licenses typically range in term up to ten years and may define the specific field of use where our customers may utilize our inventions in their products. Royalties may be structured as fixed, variable or a hybrid of fixed and variable royalty payments. Leading semiconductor and electronic system companies, such as AMD, Broadcom, CXMT, IBM, Infineon, Kioxia, Marvell, MediaTek, Micron, Nanya, Nuvoton, NVIDIA, Phison, Qualcomm, Samsung, SK hynix, Socionext, STMicroelectronics, Toshiba, Western Digital and Winbond, have licensed our patents. The vast majority of our patents originate from our internal research and development efforts. Additionally, from time to time, we enter into agreements to sell certain patent assets under agreements which may also include subsequent profit-sharing. The sale of these patents, as well as the subsequent profit-sharing, are included as part of our royalty revenue. Revenue from royalties accounted for 44% and 42% of our consolidated revenue for the three and nine months ended September 30, 2024, as compared to 27% and 29% for the three and nine months ended September 30, 2023.
Current wording
Royalties revenue is derived from our patent licenses and Silicon IP, through which we provide our customers certain rights to our broad worldwide portfolio of patented inventions, as well as royalties from IP licenses. Our patent licenses enable our customers to use a portion of our patent portfolio in their own digital electronics products. The licenses typically range in duration up to ten years and may define the specific field of use where our customers may utilize our inventions in their products. Royalties may be structured as fixed, variable or a hybrid of fixed and variable royalty payments. Leading semiconductor and electronic system companies such as AMD, Amlogic, Broadcom, CXMT, IBM, Infineon, Kioxia, Marvell, MediaTek, Micron, Nanya, Nuvoton, NVIDIA, Phison, Qualcomm, Samsung, Silicon Motion, SK hynix, Socionext, STMicroelectronics, Toshiba, Western Digital, and Winbond have licensed our patents. The vast majority of our patents originate from our internal research and development efforts. Additionally, from time to time, we enter into agreements to sell certain patent assets under agreements which may also include subsequent profit-sharing. The sale of these patents, as well as the subsequent profit-sharing, are included as part of our royalties revenue. Revenue from royalties accounted for 44% of our consolidated revenue for the three months ended March 31, 2025, as compared to 40% for the three months ended March 31, 2024.
Previous wording
Contract and other revenue consists primarily of Silicon IP, which is comprised of our high-speed interface and security IP. Revenue sources under contract and other revenue include our IP core licenses, software licenses and related implementation, support and maintenance fees and engineering services fees. The timing and amounts invoiced to customers can vary significantly depending on specific contract terms and can therefore have a significant impact on deferred revenue or accounts receivable in any given period. Contract and other revenue accounted for 10% and 14% of our consolidated revenue for the three and nine months ended September 30, 2024, as compared to 23% and 21% of our consolidated revenue for the three and nine months ended September 30, 2023. The decreases for both the three and nine months ended September 30, 2024 as compared to the same periods in 2023 were primarily attributed to the sale of our PHY IP group in the third quarter of 2023.
Current wording
Contract and other revenue consists primarily of Silicon IP, which is comprised of our high-speed interface and security IP. Revenue sources under contract and other revenue include our IP core licenses, software licenses and related implementation, support and maintenance fees and engineering services fees. The timing and amounts invoiced to customers can vary significantly depending on specific contract terms and can therefore have a significant impact on deferred revenue or accounts receivable in any given period. Contract and other revenue accounted for 10% of our consolidated revenue for the three months ended March 31, 2025, as compared to 17% of our consolidated revenue for the three months ended March 31, 2024.
Previous wording
Cost of product revenue includes costs attributable to the sale of memory and security products. Cost of product revenue increased approximately $5.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. Cost of product revenue increased approximately $2.8 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The increases in both periods were primarily due to higher sales volumes of our memory interface chips.
Current wording
Cost of product revenue mainly includes costs attributable to the sale of memory products. Cost of product revenue increased approximately $10.6 million for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to higher sales volumes of our memory interface chips.
Previous wording
Cost of contract and other revenue reflects the portion of the total engineering costs which are specifically devoted to individual customer development and support services. Cost of contract and other revenue decreased approximately $0.5 million for the three months ended September 30, 2024 as compared to the same period in 2023. Cost of contract and other revenue decreased approximately $2.0 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The decreases in both periods were primarily due to lower engineering services associated with the contracts.
Current wording
Cost of contract and other revenue reflects the portion of the total engineering costs which are specifically devoted to individual customer development and support services. Cost of contract and other revenue remained relatively flat for the three months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
As of September 30, 2024, our semiconductor, security and other technologies are covered by 2,241 U.S. and foreign patents. Additionally, we have 522 patent applications pending in various countries. Some of the patents and pending patent applications are derived from a common parent patent application or are foreign counterpart patent applications. We file applications for and obtain patents in the United States and in selected foreign countries where we believe filing for such protection is appropriate and would further our overall business strategy and objectives. In some instances, obtaining appropriate levels of protection may involve prosecuting continuation and counterpart patent applications based on a common parent application. We believe our patented innovations provide our customers with the ability to achieve improved performance, lower risk, greater cost-effectiveness, and other benefits in their products and services.
Current wording
As of March 31, 2025, our semiconductor, security and other technologies are covered by 2,244 U.S. and foreign patents. Additionally, we have 525 patent applications pending in various countries. Some of the patents and pending patent applications are derived from a common parent patent application or are foreign counterpart patent applications. We file applications for and obtain patents in the United States and in selected foreign countries where we believe filing for such protection is appropriate and would further our overall business strategy and objectives. In some instances, obtaining appropriate levels of protection may involve prosecuting continuation and counterpart patent applications based on a common parent application. We believe our patented innovations provide our customers with the ability to achieve improved performance, lower risk, greater cost-effectiveness, and other benefits in their products and services.
Previous wording
There are a number of trends that may have a material impact on us in the future, including but not limited to, the evolution of memory technology, adoption of security solutions, the use and adoption of our inventions or technologies generally, industry consolidation and global economic conditions with the resulting impact on sales of consumer electronic systems.
Current wording
There are a number of trends that may have a material impact on us in the future, including but not limited to, the evolution of memory technology, adoption of security solutions, the use and adoption of our inventions or technologies generally, industry consolidation and global economic conditions with the resulting impact on sales of consumer electronic systems. Additionally, there is ongoing uncertainty and volatility in future revenue and costs due to various macroeconomic events, such as tariffs and global inflation, which could have a significant impact on our business and operating results.
Previous wording
We have a high degree of revenue concentration. Our top five customers represented approximately 69% and 64% of our consolidated revenue for the three and nine months ended September 30, 2024, as compared to 63% and 59% for the three and nine months ended September 30, 2023, respectively. The particular customers which account for revenue concentration have varied from period-to-period as a result of the addition of new contracts, expiration of existing contracts, renewals of existing contracts, industry consolidation and the volumes and prices at which the customers have recently sold to their customers. These variations are expected to continue in the foreseeable future.
Current wording
We have a high degree of revenue concentration. Our top five customers represented approximately 71% and 64% of our consolidated revenue for the three months ended March 31, 2025 and 2024, respectively. The level of concentration and particular customers which account for this concentration have varied in the past and may vary in the future as a result of demand for our semiconductor products, timing of new contracts, expiration of existing contracts, as well as timing of contract expirations and renewals, industry consolidation and the volumes and prices at which the customers have recently sold to their customers. These variations are expected to continue in the foreseeable future.
Previous wording
Our revenue from companies headquartered outside of the United States accounted for approximately 68% and 61% of our consolidated revenue for the three and nine months ended September 30, 2024, as compared to 69% and 61% for the three and nine months ended September 30, 2023. We expect that revenue derived from international customers will continue to represent a significant portion of our total revenue in the future. Currently, our revenue from international customers is predominantly denominated in U.S. dollars. For additional information concerning international revenue, refer to Note 6, “Segments and Major Customers,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.
Current wording
Our revenue from companies headquartered outside of the United States accounted for approximately 84% of our consolidated revenue for the three months ended March 31, 2025, as compared to 56% for the three months ended March 31, 2024. We expect that revenue derived from international customers will continue to represent a significant portion of our total revenue in the future. Currently, our revenue from international customers is predominantly denominated in U.S. dollars. For additional information concerning international revenue, refer to Note 6, “Segments and Major Customers,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.
Previous wording
The royalties we receive from our semiconductor customers are partly a function of the adoption of our technologies by system companies. Many system companies purchase semiconductors containing our technologies from our customers and do not have a direct contractual relationship with us. Our customers generally do not provide us with details as to the identity or volume of licensed semiconductors purchased by particular system companies. As a result, we face difficulty in analyzing the extent to which our future revenue will be dependent upon particular system companies. Several of our licensees have renewed or extended their license agreements with us during the nine months ended September 30, 2024, including Kioxia, Marvell and Nanya.
Current wording
The royalties we receive from our semiconductor customers are partly a function of the adoption of our technologies by system companies. Many system companies purchase semiconductors containing our technologies from our customers and do not have a direct contractual relationship with us. Our customers generally do not provide us with details as to the identity or volume of licensed semiconductors purchased by particular system companies. As a result, we face difficulty in analyzing the extent to which our future revenue will be dependent upon particular system companies.
Previous wording
As a part of our overall business strategy, from time to time we evaluate businesses and technologies for potential acquisitions that are aligned with our core business and designed to supplement our growth, including the acquisition of Hardent in the second quarter of 2022. Similarly, we evaluate our current businesses and technologies that are not aligned with our core business for potential divestiture, such as the sale of our PHY IP group to Cadence in the third quarter of 2023. We expect to continue to evaluate and potentially enter into strategic acquisitions or divestitures which will impact our business and operating results.
Current wording
As a part of our overall business strategy, from time to time we evaluate businesses and technologies for potential acquisitions that are aligned with our core business and designed to supplement our growth. Similarly, we evaluate our current businesses and technologies that are not aligned with our core business for potential divestitures. We expect to continue to evaluate and potentially enter into strategic acquisitions or divestitures which will impact our business and operating results.
Previous wording
The following table sets forth, for the periods indicated, the percentage of total revenue represented by certain items reflected on our Unaudited Condensed Consolidated Statements of Operations:
Current wording
The following table sets forth, for the periods indicated, the percentage of total revenue represented by certain items reflected on our Unaudited Condensed Consolidated Statements of Income:
Previous wording
Product revenue increased approximately $14.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. Product revenue increased approximately $2.5 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The increases in both periods were primarily due to higher sales of our memory interface chips.
Current wording
Product revenue consists primarily of revenue from the sale of memory products. Product revenue increased approximately $25.9 million for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to higher sales of our memory interface chips.
Previous wording
Growth in our product revenue is dependent on, among other things, the industry transition to a new generation of memory, as well as our ability to continue to obtain orders from customers, meet our customers’ demands and mitigate any supply chain and economic disruption.
Current wording
Growth in our product revenue is dependent on, among other things, our ability to continue to obtain orders from customers, meet our customers’ demand and mitigate any supply chain and economic disruption.
Previous wording
Royalty revenue, which includes patent and technology license royalties, increased approximately $35.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. Our royalty revenue increased approximately $70.3 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The increases in both periods were primarily due to the timing and structure of license agreements and renewals.
Current wording
Royalties revenue, which includes patent and technology license royalties, increased approximately $26.5 million for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to the timing and structure of license agreements and renewals.
Previous wording
We are continuously in negotiations for licenses with prospective customers. We expect royalty revenue will continue to vary from period to period based on our success in adding new customers, renewing or extending existing agreements, as well as the level of variation in our customers’ reported shipment volumes, sales price and product mix, offset in part by the proportion of customer payments that are fixed or hybrid in nature.
Current wording
We are continuously in negotiations for licenses with prospective customers. We expect royalties revenue will continue to vary from period to period based on our success in adding new customers, renewing or extending existing agreements, as well as the level of variation in our customers’ reported shipment volumes, sales price and product mix, offset in part by the proportion of customer payments that are fixed or hybrid in nature.
Previous wording
Cost of product revenue increased approximately $5.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. Cost of product revenue increased approximately $2.8 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The increases in both periods were primarily due to higher sales volumes of our memory interface chips.
Current wording
Cost of product revenue mainly includes costs attributable to the sale of memory products. Cost of product revenue increased approximately $10.6 million for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to higher sales volumes of our memory interface chips.
Previous wording
Amortization of acquired intangible assets recognized in cost of revenue and operating expenses for the three and nine months ended September 30, 2024 decreased by approximately $0.7 million and $2.1 million, respectively, as compared to the same periods in 2023. The decreases in both periods were primarily due to the divestiture of our PHY IP group in the third quarter of 2023, which resulted in the disposal of approximately $7.4 million of net intangible assets, as well as a reduction of our amortization expense as intangibles become fully amortized.
Current wording
Amortization of acquired intangible assets recognized in cost of revenue and operating expenses for the three months ended March 31, 2025 decreased by approximately $1.6 million as compared to the same period in 2024. The decrease was due to intangible assets which became fully amortized.
Previous wording
The changes in the fair value of the earn-out liability related to the 2021 acquisition of the PLDA Group (“PLDA”), which was subject to certain revenue targets of the acquired business for a period of three years from the date of acquisition, and settled annually in shares of our common stock based on the fair value of that common stock fixed at the time we acquired PLDA. The fair value of the earn-out liability was remeasured each quarter, depending on the acquired business’s revenue performance relative to target over the applicable period, and adjusted to reflect changes in the per share value of our common stock.
Current wording
The change in the fair value of the earn-out liability related to the 2021 acquisition of PLDA Group (“PLDA”), which was subject to certain revenue targets of the acquired business for a period of three years from the date of acquisition, and was settled annually in shares of our common stock based on the fair value of that common stock fixed at the time we acquired PLDA. The fair value of the earn-out liability was remeasured each quarter, depending on the acquired business’s revenue performance relative to target over the applicable period, and adjusted to reflect changes in the per share value of our common stock.
Previous wording
During the three and nine months ended September 30, 2024, we remeasured the fair value of the earn-out liability, which resulted in reductions of $4.5 million and $5.0 million, respectively, in our Unaudited Condensed Consolidated Statements of Operations of this Form 10-Q. During the three and nine months ended September 30, 2023, we remeasured the fair value of the earn-out liability, which resulted in a reduction of $5.7 million and additional expenses of $8.1 million, respectively, in our Unaudited Condensed Consolidated Statements of Operations of this Form 10-Q. The final earn-out was achieved as of September 30, 2024 and is expected to be fully paid during the fourth quarter of 2024.
Current wording
During the three months ended March 31, 2024, we recorded expense of $0.7 million in our Unaudited Condensed Consolidated Statements of Income of this Form 10-Q. The final earn-out was achieved in the third quarter of 2024 and fully paid during the fourth quarter of 2024.
Previous wording
Interest income and other income (expense), net, includes interest income from our investment portfolio and from the significant financing component of licensing agreements, as well as any gains or losses from the re-measurement of our monetary assets or liabilities denominated in foreign currencies. For the three months ended September 30, 2024 and 2023, interest income and other income (expense), net, consisted primarily of interest income of $4.8 million and $2.5 million, respectively, generated from our investment portfolio. For the nine months ended September 30, 2024 and 2023, interest income and other income (expense), net, consisted primarily of interest income of $13.6 million and $6.4 million, respectively, generated from our investment portfolio. The increases in interest income and other income (expense), net, for the three and nine months ended September 30, 2024 as compared to the same periods in 2023 were primarily due to higher interest rates within our investment portfolio, which generated a higher interest income.
Current wording
Interest income and other income (expense), net, includes interest income from our investment portfolio and from the significant financing component of licensing agreements, as well as any gains or losses from the re-measurement of our monetary assets or liabilities denominated in foreign currencies. For the three months ended March 31, 2025 and 2024, interest income and other income (expense), net, consisted primarily of interest income of $5.0 million and $4.4 million, respectively, generated from our investment portfolio. Interest income increased during the three months ended March 31, 2025 as compared to the same period in 2024 due to an increase in our investment portfolio, partially offset by a slight decline in interest rates.
Previous wording
Interest expense consists primarily of interest expense associated with long-term software licenses. Interest expense remained flat for the three and nine months ended September 30, 2024 and 2023.
Current wording
Interest expense consists primarily of interest expense associated with long-term software licenses. Interest expense remained flat for the three months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
Our provision for income taxes for the three and nine months ended September 30, 2024 was primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2024, offset by tax benefits from excess stock-based compensation deductions. Our provision for income taxes for the three and nine months ended September 30, 2024 reflected an effective tax rate of 17.6% and 14.6%, respectively. The provision for income taxes for the three months ended September 30, 2023 was primarily driven by foreign withholding taxes and adjustments to the valuation allowance release on our U.S. deferred tax assets due to a change in forecasted taxable income and expense, offset by tax benefits from excess stock-based compensation deductions. The benefit from income taxes for the nine months ended September 30, 2023 was primarily driven by the valuation allowance release on our U.S. deferred tax assets, as well as tax benefits from excess stock-based compensation deductions, offset by foreign withholding taxes. Our income tax provision (benefit) for the three and nine months ended September 30, 2023 reflected an effective tax rate of 3.8% and (121.6)%, respectively. Our effective tax rate for the three and nine months ended September 30, 2024, differed from the U.S. statutory rate primarily due to tax benefits from excess stock-based compensation deductions. Our effective tax rate for the three and nine months ended September 30, 2023, differed from the U.S. statutory rate primarily due to the valuation allowance release on our U.S. deferred tax assets.
Current wording
Our provisions for income taxes for the three months ended March 31, 2025 and 2024 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2025 and 2024, respectively, offset by tax benefits from excess stock-based compensation deductions. Our provisions for income taxes for the three months ended March 31, 2025 and 2024 reflected effective tax rates of 10.8% and 4.2%, respectively, and differed from the U.S. statutory rate primarily due to tax benefits from excess stock-based compensation deductions.
Previous wording
During the three months ended September 30, 2024 and 2023, we paid foreign withholding taxes of $5.1 million and $5.4 million, respectively. During the nine months ended September 30, 2024 and 2023, we paid foreign withholding taxes of $15.5 million and $15.8 million, respectively.
Current wording
During the three months ended March 31, 2025 and 2024, we paid foreign withholding taxes of $5.6 million and $5.1 million, respectively.
Previous wording
During the second quarter of 2023, based on all available positive and negative evidence, we determined that it was appropriate to release the valuation allowance on the majority of our U.S. federal and state deferred tax assets. During the third quarter of 2023, we further adjusted our valuation allowance release as a result of a change in forecasted income and tax expense, primarily due to the sale of intangible assets as part of our PHY IP group divestiture. During the second quarter of 2023, we reached a cumulative income position over the previous three years. The cumulative three-year income is considered positive evidence, which is considered objective and verifiable, and thus received significant weighting. Additional positive evidence considered by us in our assessment included recent utilization of tax attribute carryforwards and future forecasts of continued profitability in the United States. Upon considering the relative impact of all evidence during the second quarter of 2023, both negative and positive, and the weight accorded to each, we concluded that it was more likely than not that the majority of our deferred tax assets would be realizable, with the exception of our California research and development credits that have not met the “more likely than not” realization threshold criteria. As a result, we released the related valuation allowance against the majority of our federal and state deferred tax assets.
Current wording
Upon considering the relative impact of all evidence during 2025, both negative and positive, and the weight accorded to each, we concluded that it was more likely than not that the majority of our deferred tax assets would be realizable, with the exception of primarily our California research and development credits that have not met the “more likely than not” realization threshold criteria. As a result, we continue to maintain a valuation allowance on only those deferred tax assets that we do not think will be realizable.
Previous wording
We currently anticipate that existing cash, cash equivalents and marketable securities balances and cash flows from operations will be adequate to meet our cash needs for at least the next 12 months. Additionally, the majorityof our cash and cash equivalents is in the United States. Our cash needs for the nine months ended September 30, 2024, were funded primarily from cash collected from our customers.
Current wording
We currently anticipate that existing cash, cash equivalents and marketable securities balances and cash flows from operations will be adequate to meet our cash needs for at least the next 12 months. Additionally, the majorityof our cash and cash equivalents are in the United States. Our cash needs for the three months ended March 31, 2025, were funded primarily from cash collected from our customers.
Previous wording
To provide us with more flexibility in returning capital to our stockholders, on October 29, 2020, our Board approved a share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2020 Repurchase Program”). Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations. There is no expiration date applicable to the 2020 Repurchase Program. The 2020 Repurchase Program replaced the previous program approved by our Board in January 2015 and canceled the previous outstanding authorization. During the nine months ended September 30, 2024, we repurchased shares of our common stock under the 2020 Repurchase Program as discussed in the “Share Repurchase Program” section below.
Current wording
To provide us with more flexibility in returning capital to our stockholders, on October 29, 2020, our Board approved a share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2020 Repurchase Program”). Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations. There is no expiration date applicable to the 2020 Repurchase Program. During the three months ended March 31, 2025, we repurchased shares of our common stock under the 2020 Repurchase Program as discussed in the “Share Repurchase Program” section below.
Previous wording
Cash provided by operating activities of $171.6 million for the nine months ended September 30, 2024, was primarily attributable to the cash generated from customer licensing, product sales and engineering services fees. Changes in operating assets and liabilities for the nine months ended September 30, 2024 primarily included decreases in unbilled receivables and prepaids and other current assets and an increase in income taxes payable, offset by increases in income taxes receivable, inventories and accounts receivable, and a decrease in accrued salaries and benefits.
Current wording
Cash provided by operating activities of $77.4 million for the three months ended March 31, 2025, was primarily attributable to the cash generated from product sales, customer licensing and engineering services fees. Changes in operating assets and liabilities for the three months ended March 31, 2025 primarily included an increase in income taxes payable and decreases in accounts receivable and unbilled receivables, offset by a decrease in accrued salaries and benefits and other accrued liabilities, as well as an increase in income taxes receivable.
Previous wording
Cash provided by operating activities of $140.9 million for the nine months ended September 30, 2023, was primarily attributable to the cash generated from customer licensing, product sales and engineering services fees. Changes in operating assets and liabilities for the nine months ended September 30, 2023 primarily included a decrease in unbilled receivablesand an increase in income taxes payable, offset by increases in income taxes receivable, inventories and accounts receivable, as well as decreases in accounts payable, accrued salaries and benefits and deferred revenue.
Current wording
Cash provided by operating activities of $39.1 million for the three months ended March 31, 2024, was primarily attributable to the cash generated from customer licensing, product sales and engineering services fees. Changes in operating assets and liabilities for the three months ended March 31, 2024 primarily included decreases in unbilled receivables and prepaids and other current assets, as well as increases in income taxes payable and accounts payable, offset by increases in inventories, accounts receivable, and decreases in accrued salaries and benefits and other liabilities.
Previous wording
Cash provided by investing activities of $30.9 million for the nine months ended September 30, 2023, consisted of proceeds from the maturities and sales of available-for-sale marketable securities of $127.5 million and $117.8 million, respectively, and net proceeds from the sale of our PHY IP group of $106.3 million, offset by purchases of available-for-sale marketable securities of $298.3 million and $22.5 million paid to acquire property, plant and equipment.
Current wording
Cash used in investing activities of $8.4 million for the three months ended March 31, 2025, consisted of purchases of available-for-sale marketable securities of $91.2 million and $7.9 million paid to acquire property and equipment, offset by proceeds from the maturities of available-for-sale marketable securities of $90.7 million.
Previous wording
Cash provided by investing activities of $13.0 million for the nine months ended September 30, 2024, consisted of proceeds from the maturities and sales of available-for-sale marketable securities of $206.9 million and $85.7 million, respectively, and net proceeds from the sale of a non-marketable equity security of $22.8 million, offset by purchases of available-for-sale marketable securities of $278.2 million, and $24.2 million paid to acquire property, plant and equipment.
Current wording
Cash provided by investing activities of $71.4 million for the three months ended March 31, 2024, consisted of proceeds from the maturities and sales of available-for-sale marketable securities of $100.7 million and $63.4 million, respectively, and net proceeds from the sale of a non-marketable equity security of $22.8 million, offset by purchases of available-for-sale marketable securities of $112.5 million and $3.0 million paid to acquire property and equipment.
Previous wording
Cash used in financing activities of $165.4 million for the nine months ended September 30, 2023, was primarily due to an aggregate payment of $100.3 million as part of our 2023 ASR program (includes $0.3 million in fees related to the ASR program), $36.7 million in payments of taxes on restricted stock units, $11.3 million paid under installment payment arrangements to acquire fixed assets, $10.7 million paid for the retirement of the remaining outstanding warrants, and $10.4 million in aggregate principal amount paid upon maturity of the remaining outstanding 2023 Notes, offset by $6.5 million in proceeds from the issuance of common stock under equity incentive plans.
Current wording
Cash used in financing activities of $36.8 million for the three months ended March 31, 2025, was primarily due to $30.8 million in payments of taxes on restricted stock units, $3.8 million paid under installment payment arrangements to acquire fixed assets, and an aggregate payment of $2.2 million as part of our share repurchases in the first quarter of 2025.
Previous wording
Cash used in financing activities of $165.3 million for the nine months ended September 30, 2024, was primarily due to an aggregate payment of $113.3 million as part of our 2024 ASR program and the Buying Plan (includes $0.2 million in fees related to the ASR program), $40.3 million in payments of taxes on restricted stock units, and $12.7 million paid under installment payment arrangements to acquire fixed assets, offset by $3.4 million in proceeds from the issuance of common stock under equity incentive plans.
Current wording
Cash used in financing activities of $92.3 million for the three months ended March 31, 2024, was primarily due to an aggregate payment of $50.8 million as part of our share repurchases in the first quarter of 2024 (includes $0.2 million in fees related to the ASR program), $37.7 million in payments of taxes on restricted stock units and $4.0 million paid under installment payment arrangements to acquire fixed assets.
Previous wording
(1) The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $126.9 million, including $25.6 million recorded as a reduction of long-term deferred tax assets and $101.3 million in long-term income taxes payable as of September 30, 2024. As noted in Note 14, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the timing of the outcome at this time.
Current wording
(1) The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $138.3 million, including $23.2 million recorded as a reduction of long-term deferred tax assets and $115.1 million in long-term income taxes payable as of March 31, 2025. As noted in Note 13, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the timing of the outcome at this time.
Previous wording
(4) In connection with the acquisitions of Hardent in the second quarter of 2022 and PLDA in the third quarter of 2021, we are obligated to pay retention bonuses to certain employees subject to certain eligibility and acceleration provisions, including the condition of employment.
Current wording
(4) In connection with the acquisitions of Hardent, Inc. in the second quarter of 2022 and PLDA in the third quarter of 2021, we are obligated to pay retention bonuses to certain employees subject to certain eligibility and acceleration provisions, including the condition of employment.
Previous wording
On October 29, 2020, our Board approved the 2020 Repurchase Program authorizing the repurchase of up to an aggregate of 20.0 million shares. Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations. There is no expiration date applicable to the 2020 Repurchase Program. The 2020 Repurchase Program replaced the previous program approved by the Board in January 2015 and canceled the previous outstanding authorization. During the nine months ended September 30, 2024, we repurchased shares of our common stock under the 2020 Repurchase Program as discussed below.
Current wording
On October 29, 2020, our Board approved the 2020 Repurchase Program authorizing the repurchase of up to an aggregate of 20.0 million shares. Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations. There is no expiration date applicable to the 2020 Repurchase Program.
Previous wording
On November 2, 2023, we entered into a share repurchase plan (the “Buying Plan”) with RBC Capital Markets, LLC (“RBCCM”). The Buying Plan was part of the 2020 Repurchase Program. Under the Buying Plan, RBCCM commenced purchases for a 12-month period starting on November 2, 2023 and ending on November 1, 2024, with a provision to terminate sooner pursuant to the Buying Plan (the “Repurchase Period”). During the first quarter of 2024, the Buying Plan was amended and as a result, no purchases were made from the Buying Plan during the period from March 1, 2024 to March 28, 2024, while the 2024 ASR Program was in effect. During the third quarter of 2024, the Buying Plan was further amended to allow RBCCM to purchase an aggregate amount of $100.0 million of our common stock, not to exceed $50.0 million in a quarter. The execution of share repurchases is dependent on our stock price reaching certain levels. During the nine months ended September 30, 2024, we repurchased approximately 1.4 million shares for approximately $63.1 million as part of the Buying Plan, which were retired and recorded as a reduction to stockholders’ equity.
Current wording
In February 2025, we entered into a share repurchase plan (the “Buying Plan”) with Mizuho Securities USA, LLC (“Mizuho”). The Buying Plan was part of the 2020 Repurchase Program. Under the Buying Plan, Mizuho commenced purchases during the period from February 6, 2025 to March 31, 2025, with a provision to terminate sooner pursuant to the Buying Plan. The execution of share repurchases was dependent on our stock price reaching certain levels. During the three months ended March 31, 2025, we repurchased an immaterial amount of shares as part of the Buying Plan, which were retired and recorded as a reduction to stockholders’ equity.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cost of contract and other revenue reflects the portion of the total engineering costs which are specifically devoted to individual customer development and support services. Cost of contract and other revenue remained relatively flat for the three months ended March 31, 2025 as compared to the same period in 2024.