RAMBUS INC

1. Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Rambus Inc. (“Rambus” or the “Company”) and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying Unaudited Condensed Consolidated Financial Statements.

In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments (consisting only of normal recurring items) necessary to state fairly the financial position and results of operations for each interim period presented. Interim results are not necessarily indicative of results for a full year.

Financial Statement Preparation

The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. Certain information and note disclosures included in the financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been omitted in these interim statements pursuant to such SEC rules and regulations. The information included in this Form 10-Q should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto in Form 10-K for the year ended December 31, 2024.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Reclassifications

Certain prior-year balances were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported net income or cash flows for any of the periods presented.

Significant Accounting Policies

There were no material changes to Rambus’ significant accounting policies disclosed in Note 2, “Summary of Significant Accounting Policies,” of Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

2. Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires additional disclosures related to rate reconciliation, income taxes paid and other disclosures. For each annual period presented, public business entities are required to 1) disclose specific categories in the rate reconciliation and 2) provide additional information for reconciling items that meet a quantitative threshold. In addition, this ASU requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as the amount of income taxes paid disaggregated by individual jurisdictions which meet a quantitative threshold. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this ASU should be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”).” This guidance requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement expense caption, as applicable. The ASU also requires a qualitative description of the amounts remaining in expense captions that are not separately disaggregated quantitatively, as well as disclosure of the total amount of selling expenses and, in annual reporting periods, the entity’s definition of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

3. Revenue Recognition

Contract Balances

The contract assets are primarily related to the Company’s fixed fee intellectual property (“IP”) licensing arrangements and rights to consideration for performance obligations delivered but not billed as of June 30, 2025.

The Company’s contract balances were as follows:

During the six months ended June 30, 2025, the Company recognized$14.7 million of revenue that was included in deferred revenue as of December 31, 2024. During the six months ended June 30, 2024, the Company recognized$14.3 million of revenue that was included in deferred revenue as of December 31, 2023.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately$31.3 million as of June 30, 2025, which the Company primarily expects to recognize over the nexttwo years.

4. Earnings Per Share

Basic earnings per share is calculated by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted-average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of restricted stock units, incremental common shares issuable upon exercise of stock options and employee stock purchases. The dilutive effect of outstanding shares is reflected in diluted earnings per share using the treasury stock method, as applicable. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported.

The following table sets forth the computation of basic and diluted net income per share:

5. Intangible Assets, Net

The components of the Company’s intangible assets as of June 30, 2025 and December 31, 2024 were as follows:

Amortization expense for intangible assets for the three and six months ended June 30, 2025 was$1.7 million and$3.4 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2024 was$3.2 million and$6.5 million, respectively.

The estimated future amortization of intangible assets as of June 30, 2025 was as follows (in thousands):

6. Segments and Major Customers

Operating segments are based upon the Company’s internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker (“CODM”) to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment.

The Company has determined its CODM to be the Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating decisions and assessing financial performance. On this basis, the Company is organized and operates as a single segment within the semiconductor space. As of June 30, 2025, the Company has asingle operating and reportable segment.

The CODM uses net income to assess segment performance, allocate resources and manage the business on a consolidated basis. The significant expenses for the segment exclude certain non-cash adjustments and non-recurring items, and are used to monitor budget versus actual results and to analyze the period-over-period comparisons.

The significant expenses that are regularly provided to the CODM and reconciliations to the consolidated net income for thethree and six months ended June 30, 2025 and 2024, respectively, were as follows:

(1)

Excludes stock-based compensation expenses and amortization of acquisition-related intangible assets.

(2)

Excludes stock-based compensation expenses and retention bonus expense related to acquisitions.

(3)

Excludes stock-based compensation expenses and acquisition-related costs and retention bonus expense.

(4)

The Company excludes these expenses from its adjusted cost of revenue and operating expenses primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results.

(5)

The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and have no direct correlation to the Company’s ongoing operating results.

The following represents the Company’s significant expenses related to research and development expenses and sales, general and administrative expenses, as shown above, for the three and six months ended June 30, 2025 and 2024, respectively.

(1)

Includes primarily software tools, software licenses and prototyping costs.

The measure of segment assets is reported on the Company’s Unaudited Condensed Consolidated Balance Sheets as total consolidated assets.

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable as of June 30, 2025 and December 31, 2024, respectively, was as follows:

Revenue from the Company’s major customers representing 10% or more of total revenue for thethree and six months ended June 30, 2025 and 2024, respectively, was as follows:

• Customer accounted for less than 10% of total revenue in the period.

Revenue from customers in the geographic regions based on the location of contracting parties was as follows:

7. Marketable Securities

Rambus invests its excess cash and cash equivalents primarily in U.S. government-sponsored obligations, non-U.S. government-sponsored obligations, corporate bonds, commercial paper and notes, time deposits and money market funds that mature within three years.

All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows:

Available-for-sale securities are reported at fair value on the balance sheets and classified along with cash as follows:

The Company continues to invest in highly rated, liquid debt securities. The Company holds all of its marketable securities as available-for-sale, marks them to market, and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation, and impairment.

The estimated fair value and gross unrealized losses of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position as of June 30, 2025 and December 31, 2024 were as follows:

The gross unrealized losses as of June 30, 2025 and December 31, 2024 were not material in relation to the Company’s total available-for-sale portfolio. The gross unrealized losses can be primarily attributed to a combination of market conditions, as well as the demand for and duration of the U.S. government-sponsored obligations and corporate bonds, commercial paper and notes. The Company reasonably believes that there is no need to sell these investments and that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. Therefore, these unrealized losses were recorded in other comprehensive income (loss). The Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results.

The contractual maturities of cash equivalents (excluding money market funds which have no maturity) and marketable securities are summarized as follows:

Refer to Note 8, “Fair Value of Financial Instruments,” for a discussion regarding the fair value of the Company’s cash equivalents and marketable securities.

8. Fair Value of Financial Instruments

The following table presents the financial instruments that are carried at fair value and summarizes their valuation by the respective pricing levels as of June 30, 2025 and December 31, 2024:

The following table presents additional information about liabilities measured at fair value for which the Company utilized Level 3 inputs to determine fair value, as of June 30, 2024.

For the three and six months ended June 30, 2024, 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 the Company’s common stock based on the fair value of that common stock fixed at the time the Company 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 the Company’s common stock. The Company classified its earn-out liability within Level 3 of the fair value hierarchy because the fair value calculation included significant unobservable inputs, such as revenue forecast, revenue volatility, equity volatility and weighted-average cost of capital. During the three and six months ended June 30, 2024, the Company remeasured the fair value of the earn-out liability, which resulted in reductions of $1.2 million and $0.5 million, respectively, in the Company’s Unaudited Condensed Consolidated Statements of Income. The final earn-out was achieved in the third quarter of 2024 and fully paid during the fourth quarter of 2024.

The Company monitors its investments for impairment and records appropriate reductions in carrying value when necessary. During the six months ended June 30, 2025 and 2024, the Company recorded no other-than-temporary impairment charges on its investments.

During the six months ended June 30, 2025 and 2024, there were no transfers of financial instruments between different categories of fair value.

9. Leases

The Company leases office space, domestically and internationally, under operating leases. The Company’s leases have remaining lease terms generally betweenone year andeight years. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities and long-term operating lease liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets. The Company does not have any finance leases.

The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the Unaudited Condensed Consolidated Balance Sheet as of June 30, 2025 (in thousands):

As of June 30, 2025, the weighted-average remaining lease term for the Company’s operating leases was 4.9 years and the weighted-average discount rate used to determine the present value of the Company’s operating leases was 7.6%.

Operating lease costs included in research and development and selling, general and administrative costs in the Unaudited Condensed Consolidated Statements of Income were$1.5 million and$1.4 million for the three months ended June 30, 2025 and 2024, respectively. Operating lease costs included in research and development and selling, general and administrative costs in the Unaudited Condensed Consolidated Statements of Income were$2.9 million and$2.6 million for the six months ended June 30, 2025 and 2024, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was$3.6 million and$3.0 million for the six months ended June 30, 2025 and 2024, respectively.

10. Commitments and Contingencies

As of June 30, 2025, the Company’s material contractual obligations were as follows:

(1)

The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately$143.8 million, including$23.6 million recorded as a reduction of long-term deferred tax assets and$120.2 million in long-term income taxes payable as of June 30, 2025. As noted below in Note 13, “Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the timing of the outcome at this time.

(2)

For the Company’s lease commitments as of June 30, 2025, refer to Note 9, “Leases.”

(3)

The Company has commitments with various software vendors for agreements generally having terms longer thanone year.

From time to time, the Company indemnifies certain customers as a necessary means of doing business. Indemnification covers customers for losses suffered or incurred by them as a result of any patent, copyright, or other IP infringement or any other claim by any third party arising as a result of the applicable agreement with the Company. The Company generally attempts to limit the maximum amount of indemnification that the Company could be required to make under these agreements to the amount of fees received by the Company, however this may not always be possible. The fair value of the liability as of June 30, 2025 and December 31, 2024, respectively, was not material.

11. Equity Incentive Plans and Stock-Based Compensation

A summary of shares available for grant under the Company’s plans is as follows:

(1)

For purposes of determining the number of shares available for grant under the 2015 Equity Incentive Plan against the maximum number of shares authorized, each restricted stock unit granted prior to April 27, 2023 reduces the number of shares available for grant by 1.5 shares and each restricted stock unit forfeited increases shares available for grant by 1.5 shares. Each restricted stock unit granted on or after April 27, 2023 reduces the number of shares available for grant by 1.0 share and each restricted stock unit forfeited increases shares available for grant by 1.0 share.

(2)

Amount includes approximately 0.2 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in the second quarter of 2025 and discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

Employee Stock Purchase Plan

Under the 2015 Employee Stock Purchase Plan (“2015 ESPP”), the Company issued 91,827 shares at a price of$40.76 and 69,828 shares at a price of$44.84 per share during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, approximately 2.2 million shares under the 2015 ESPP remained available for issuance.

Stock-Based Compensation

For the six months ended June 30, 2025 and 2024, the Company maintained stock plans covering a broad range of potential equity grants, including stock options, nonvested equity stock and equity stock units and performance-based instruments. In addition, the Company sponsors the 2015 ESPP, whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15% discount from the fair market value of the common stock as of specific dates.

Stock-based compensation expense recorded in the Unaudited Condensed Consolidated Statements of Income was as follows:

Nonvested Equity Stock and Stock Units

The Company grants nonvested equity stock units to officers, employees and directors. These awards have a service condition, generally a service period offour years, except in the case of grants to directors, for which the service period isone year. The Company also grants performance unit awards to certain company executive officers with vesting subject to the achievement of certain performance and/or market conditions. The ultimate number of performance units that can be earned can range from 0% to 200% of target depending on performance relative to target over the applicable period. The shares earned will vest on the third or fourth anniversary of the date of grant. The Company’s shares available for grant have been reduced to reflect the shares that could be earned at the maximum target.

Unrecognized stock-based compensation related to all nonvested equity stock grants, net of estimated forfeitures, was approximately$113.9 million as of June 30, 2025. This amount is expected to be recognized over a weighted-average period of 2.4 years.

The following table reflects the activity related to nonvested equity stock and stock units for thesix months ended June 30, 2025:

12. Stockholders’ Equity

On October 29, 2020, the Company’s board of directors (the “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 six months ended June 30, 2025, the Company entered into share repurchase plans (the “Buying Plans”) with Mizuho Securities USA, LLC (“Mizuho”), pursuant to which Mizuho will repurchase shares of the Company's common stock during the periods from February 6, 2025 through March 31, 2025 and from May 1, 2025 through September 30, 2025, respectively, with provisions to terminate sooner. The Buying Plans are part of the 2020 Repurchase Program. The execution of share repurchases is dependent on the Company’s stock price reaching certain levels. During the six months ended June 30, 2025, the Company repurchased 0.1 million shares for approximately $5.8 million as part of the Buying Plans, which were retired and recorded as a reduction to stockholders’ equity.

During the six months ended June 30, 2024, the Company repurchased approximately 1.0 million shares for approximately $63.4 million under the 2020 Repurchase Program, which were retired and recorded as a reduction to stockholders’ equity.

As of June 30, 2025, there remained an outstanding authorization to repurchase approximately 5.6 million shares of the Company’s outstanding common stock under the 2020 Repurchase Program.

The Company records share repurchases as a reduction to stockholders’ equity. The Company records a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock in accordance with its accounting policy.

13. Income Taxes

The Company recorded a provision for income taxes of$9.9 million and$8.3 million for the three months ended June 30, 2025 and 2024, respectively, and a provision for income taxes of$17.2 million and$9.7 million for the six months ended June 30, 2025 and 2024, respectively. The provisions for income taxes for the three and six months ended June 30, 2025 and 2024 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for the respective fiscal years, offset by tax benefits from excess stock-based compensation deductions.

During the three months ended June 30, 2025 and 2024, the Company paid foreign withholding taxes of$5.4 million and$5.3 million, respectively. During the six months ended June 30, 2025 and 2024, the Company paid foreign withholding taxes of$11.0 million and$10.3 million, respectively.

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.

Upon considering the relative impact of all evidence during 2025, both negative and positive, and the weight accorded to each, the Company concluded that it was more likely than not that the majority of its deferred tax assets would be realizable, with the exception of primarily its California research and development credits that have not met the “more likely than not” realization threshold criteria. As a result, the Company continues to maintain a valuation allowance on only those deferred tax assets that it does not think will be realizable.

The Company has U.S. federal deferred tax assets related to research and development credits, foreign tax credits and other tax attributes that can be used to offset U.S. federal taxable income in future periods. These credit carryforwards will expire if they are not used within certain time periods. It is possible that some or all of these attributes could ultimately expire unused.

The Company maintains liabilities for uncertain tax positions within its long-term income taxes payable accounts and as a reduction to existing deferred tax assets to the extent tax attributes are available to offset such liabilities. These liabilities involve judgment and estimation and are monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases and other information.

As of December 31, 2024, the Company had$203.8 million of unrecognized tax benefits, before interest accrual, including$22.8 million recorded as a reduction of long-term deferred tax assets,$74.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and$106.2 million recorded to long-term income taxes payable, which are primarily comprised of$105.1 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea.

As of June 30, 2025, the Company had approximately$214.3 million of unrecognized tax benefits, before interest accrual, including$23.6 million recorded as a reduction of long-term deferred tax assets,$74.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and$115.9 million recorded to long-term income taxes payable, which are primarily comprised of$114.9 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea.

As a result of recent court rulings in 2023, the Company determined that it is more likely than not that withholding taxes paid in South Korea in the preceding five years are recoverable. In October 2023, the Company filed refund claims for withholding taxes paid in South Korea in the amount of$82.7 million related to the period from the fourth quarter of 2018 through the third quarter of 2023. The Company intends to file additional refund claims in the future for$4.2 million of withholding taxes paid in the fourth quarter of 2023,$18.2 million paid in 2024, and$9.8 million paid year-to-date in 2025. Therefore, the Company recorded long-term tax receivables of$114.9 million and $105.1 million, before interest accrual, related to these refund claims as of June 30, 2025 and December 31, 2024, respectively.

If the South Korea withholding taxes are recovered through the refund claim process, the U.S. foreign tax credit claimed for these withholding taxes on historical federal tax returns will be forfeited. Therefore, the Company recorded a long-term tax payable of$114.9 million and$105.1 million as of June 30, 2025 and December 31, 2024, respectively. These amounts exclude interest and reflect the future U.S. federal tax liability in the event of filing amended federal tax returns to revise the foreign tax credit amounts.

The recovery of South Korea withholding taxes paid before the fourth quarter of 2018 of$74.8 million is uncertain due to the statute of limitations for filing a refund claim. Thus, the Company did not record a long-term tax receivable and included the amount in the uncertain tax benefit. Although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time.

Additionally, the Company’s future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of its deferred tax assets and liabilities or by changes in tax laws or interpretations of those laws.

On July 4, 2025, the United States enacted federal tax legislation commonly referred to as the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. As a result of the enactment of the legislation, the Company expects an increase to tax expense during the third and fourth quarters of 2025, primarily related to changes in the taxation of profits derived from foreign operations, and more specifically, the foreign-derived intangible income deduction. The Company continues to evaluate the impact the new legislation will have on its consolidated financial statements. As the assessment is ongoing, the Company is not able to quantify the specific impact on its consolidated financial statements at this time.

14. Litigation and Contingent Liability

Rambus is not currently a party to any material pending legal proceeding; however, from time to time, Rambus may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management attention and resources and other factors.

The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies.