RAMBUS INC
For the period ended Mar 31, 2026. Filed Apr 28, 2026.
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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, 2026 · Filed Apr 28, 2026
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 2025-09-30; filed 2025-10-28.
0001193125-25-253472
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001193125-26-186931
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 107 previous paragraphs and 99 current paragraphs.
50 unchanged; 37 reworded; 12 added; 19 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 11 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 (12)
Current report
Rambus is a global semiconductor company providing industry-leading chips and silicon IP for data-intensive computing systems, focusing on data center and artificial intelligence (“AI”) infrastructure.
Current report
As a pioneer with over three decades of advanced semiconductor design experience, Rambus is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of signal and power integrity at increasingly extreme data rates 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, IP and patents that maximize performance and security in computationally intensive systems.
Current report
The ongoing proliferation of AI is placing unprecedented demands on computing infrastructure, requiring massive amounts of processor performance and extremely high memory bandwidth. As workloads grow in size and diversity, system performance becomes memory bound, making the memory interface technology a critical determinant of overall throughput. This persistent gap between processor performance and memory subsystem capabilities remains one of the largest bottlenecks in high performance compute systems. In addition, power management is increasingly important to optimize system efficiency and thermals as the power-performance demands continue to rise.
Current report
Revenue of $180.2 million;
Current report
Operating expenses of $81.9 million;
Current report
Diluted net income per share of $0.55; and
Current report
Net cash provided by operating activities of $83.2 million.
Current report
Total research and development expenses for the three months ended March 31, 2026 increased approximately $7.6 million as compared to the same period in 2025. The increase was driven by continued investment in our research and development initiatives and primarily reflected higher headcount-related expenses of $4.1 million and an increase in stock-based compensation expenses of $0.8 million. In addition, prototyping costs and depreciation expense increased by $1.4 million and $1.0 million, respectively.
Current report
Total sales, general and administrative expenses for the three months ended March 31, 2026 increased approximately $3.7 million as compared to the same period in 2025, primarily due to increases in payroll-related expenses and legal expenses of $2.1 million and $1.6 million, respectively, offset by a decrease in stock-based compensation expenses of $0.6 million.
Current report
Revenue
Current report
Total research and development expenses for the three months ended March 31, 2026 increased approximately $7.6 million as compared to the same period in 2025. The increase was driven by continued investment in our research and development initiatives and primarily reflected higher headcount-related expenses of $4.1 million and an increase in stock-based compensation expenses of $0.8 million. In addition, prototyping costs and depreciation expense increased by $1.4 million and $1.0 million, respectively.
Current report
Total sales, general and administrative expenses for the three months ended March 31, 2026 increased approximately $3.7 million as compared to the same period in 2025, primarily due to increases in payroll-related expenses and legal expenses of $2.1 million and $1.6 million, respectively, offset by a decrease in stock-based compensation expenses of $0.6 million.
Removed paragraphs (19)
Previous report
Rambus is a provider of industry-leading chips and silicon IP making data faster and safer. With 35 years of advanced semiconductor experience, we are a pioneer in high-performance memory solutions that solve the bottleneck between memory and processing for data-intensive systems. Whether in the cloud, at the edge or in your hand, real-time and immersive applications depend on data throughput and integrity. Rambus 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. For more information, visit rambus.com.
Previous report
The explosion of data-intensive workloads, driven by the proliferation of generative artificial intelligence (“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.
Previous report
Revenue of $178.5 million;
Previous report
Operating expenses of $78.7 million; and
Previous report
Net cash provided by operating activities of $88.4 million.
Previous report
Total research and development expenses for the three months ended September 30, 2025 increased approximately $8.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $5.2 million and stock-based compensation expenses of $0.8 million, both driven primarily by headcount growth, as well as an increase in depreciation expense of $0.9 million. Total research and development expenses for the nine months ended September 30, 2025 increased approximately $19.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $15.0 million and stock-based compensation expenses of $3.0 million, both driven primarily by headcount growth, and an increase in depreciation expense of $1.5 million, partially offset by a decrease in prototyping costs of $2.4 million.
Previous report
Total sales, general and administrative expenses for the three months ended September 30, 2025 increased approximately $3.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $2.2 million and stock-based compensation expenses of $1.3 million, both driven primarily by headcount growth, as well as an increase in sales and marketing activities of $0.7 million, partially offset by a decrease in consulting expense of $1.0 million. Total sales, general and administrative expenses for the nine months ended September 30, 2025 increased approximately $9.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $5.4 million and stock-based compensation expenses of $3.4 million, both driven primarily by headcount growth, as well as increases in depreciation expense of $0.9 million and sales and marketing activities of $0.8 million, partially offset by a decrease in consulting expense of $1.5 million.
Previous report
Total research and development expenses for the three months ended September 30, 2025 increased approximately $8.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $5.2 million and stock-based compensation expenses of $0.8 million, both driven primarily by headcount growth, as well as an increase in depreciation expense of $0.9 million.
Previous report
Total research and development expenses for the nine months ended September 30, 2025 increased approximately $19.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $15.0 million and stock-based compensation expenses of $3.0 million, both driven primarily by headcount growth, and an increase in depreciation expense of $1.5 million, partially offset by a decrease in prototyping costs of $2.4 million.
Previous report
Total sales, general and administrative expenses for the three months ended September 30, 2025 increased approximately $3.3 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $2.2 million and stock-based compensation expenses of $1.3 million, both driven primarily by headcount growth, as well as an increase in sales and marketing activities of $0.7 million, partially offset by a decrease in consulting expense of $1.0 million.
Previous report
Total sales, general and administrative expenses for the nine months ended September 30, 2025 increased approximately $9.2 million as compared to the same period in 2024, primarily due to increases in payroll-related expenses of $5.4 million and stock-based compensation expenses of $3.4 million, both driven primarily by headcount growth, as well as increases in depreciation expense of $0.9 million and sales and marketing activities of $0.8 million, partially offset by a decrease in consulting expense of $1.5 million.
Previous report
Amortization of acquired intangible assets recognized in cost of revenue and operating expenses for the three and nine months ended September 30, 2025 decreased by approximately $1.2 million and $4.2 million, respectively, as compared to the same periods in 2024. The decreases in both periods were due to intangible assets which became fully amortized.
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 Statements of Income 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
Change in Fair Value of Earn-Out Liability
Previous report
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 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 report
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 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 report
On September 18, 2025, the South Korean Supreme Court ruled that the use of any patents in South Korea constitutes domestic source income under the South Korea–U.S. Tax Treaty, even if such patents are not registered with the patent office in South Korea. Based on this ruling, patent license royalties are subject to South Korean withholding tax if the patents are used in South Korea. As a result of this ruling, we determined that it is not more likely than not that withholding taxes paid in South Korea are recoverable. Consequently, we recorded an uncertain tax position reserve on the $82.7 million of outstanding refund claims relating to the period from the fourth quarter of 2018 through the third quarter of 2023, reducing the previously recorded long-term tax receivable for these refund claims to zero, as we determined it is not more likely than not that the withholding taxes paid in South Korea are recoverable. We also removed the $32.2 million long-term tax receivable previously recorded for withholding taxes paid during the fourth quarter of 2023 through the second quarter of 2025. As a result, the total long-term tax receivable balance of $114.9 million, excluding interest, was reduced to zero in the third quarter of 2025. The related long-term tax payable of $114.9 million, excluding interest, was also reduced to zero, resulting in zero tax expense impact.
Previous report
During the nine months ended September 30, 2024, we repurchased approximately 2.2 million shares for approximately $113.8 million (includes excise tax) under the 2020 Repurchase Program, which were retired and recorded as a reduction to stockholders’ equity.
Reworded paragraphs (37)
Previous wording
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 wording
Rambus is well positioned to address these challenges. Leveraging our deep expertise in memory technology and innovative architectures, we provide industry-leading memory interface chips that enable the highest bandwidth, capacity and power efficient server memory modules, maximizing memory performance and reliability for the most demanding data-intensive workloads. Beyond the data center, server-class technologies are waterfalling into client devices to bring these same benefits to end-user systems, such as AI personal computers (“PCs”).
Previous wording
Our continued execution delivered strong results during the third quarter of 2025, driven primarily by increasing demand for our memory interface chips.
Current wording
Our continued execution delivered strong results during the first quarter of 2026, driven primarily by continued demand for our memory interface chips.
Previous wording
Key third quarter 2025 financial results included:
Current wording
Key first quarter 2026 financial results included:
Previous wording
We achieved record quarterly product revenue of $93.3 million in the third quarter of 2025, which increased by approximately 41% as compared to the same period in 2024. Our chip business continues to be a key growth engine for us.
Current wording
We achieved quarterly product revenue of $88.0 million in the first quarter of 2026, which increased by approximately 15% as compared to the same period in 2025, reflecting strong execution in our memory and interface portfolio.
Previous 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 and client memory modules. Product revenue accounted for 52% and 49% of our consolidated revenue for the three and nine months ended September 30, 2025, respectively, as compared to 46% and 44% for the three and nine months ended September 30, 2024, respectively.
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 and client memory modules. Product revenue accounted for 49% of our consolidated revenue for the three months ended March 31, 2026, as compared to 46% for the three months ended March 31, 2025.
Previous 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, Winbond, and YMTC 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 37% and 40% of our consolidated revenue for the three and nine months ended September 30, 2025, respectively, as compared to 44% and 42% for the three and nine months ended September 30, 2024, respectively.
Current wording
Royalties 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 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 39% of our consolidated revenue for the three months ended March 31, 2026, as compared to 44% for the three months ended March 31, 2025.
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 11% of our consolidated revenue for each of the three and nine months ended September 30, 2025, as compared to 10% and 14% of our consolidated revenue for the three and nine months ended September 30, 2024, respectively.
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 12% of our consolidated revenue for the three months ended March 31, 2026, as compared to 10% of our consolidated revenue for the three months ended March 31, 2025.
Previous wording
Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $9.7 million and $29.9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases 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 interface chip products. Cost of product revenue increased approximately $3.1 million for the three months ended March 31, 2026 as compared to the same period in 2025, 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 $0.3 million and $0.6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decreases 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 increased $0.5 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to higher engineering services associated with the contracts.
Previous wording
As of September 30, 2025, our semiconductor, security and other technologies are covered by 2,080 U.S. and foreign patents. Additionally, we have 475 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, 2026, our semiconductor, security and other technologies are covered by 2,029 U.S. and foreign patents. Additionally, we have 481 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
We have a high degree of revenue concentration. Our top five customers represented approximately 67% of our consolidated revenue for each of the three and nine months ended September 30, 2025, as compared to 69% and 64% for the three and nine months ended September 30, 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.
Current wording
We have a high degree of revenue concentration. Our top five customers represented approximately 70% and 71% of our consolidated revenue for the three months ended March 31, 2026 and 2025, 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 85% and 83% of our consolidated revenue for the three and nine months ended September 30, 2025, as compared to 68% and 61% for the three and nine months ended September 30, 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.
Current wording
Our revenue from companies headquartered outside of the United States accounted for approximately 88% and 84% of our consolidated revenue for the three months ended March 31, 2026 and 2025, respectively. 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
Product revenue consists primarily of revenue from the sale of memory products. Product revenue increased approximately $26.9 million and $77.6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases were due to higher sales of memory interface chips, as well as contributions from new products.
Current wording
Product revenue consists primarily of revenue from the sale of memory products. Product revenue increased approximately $11.7 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was due to higher sales of memory interface chips, as well as contributions from new products.
Previous wording
Royalties revenue, which includes patent and technology license royalties, increased approximately $1.0 million and $39.7 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases were primarily due to the timing and structure of license agreements and renewals.
Current wording
Royalties revenue, which includes patent and technology license royalties, decreased approximately $4.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily due to the timing and structure of license agreements and renewals.
Previous wording
Contract and other revenue consists of revenue from technology development projects. Contract and other revenue increased approximately $5.1 million and $4.6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases were due to higher revenue associated with our Silicon IP offerings.
Current wording
Contract and other revenue consists of revenue from technology development projects. Contract and other revenue increased approximately $6.2 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was due to higher revenue associated with our Silicon IP offerings.
Previous wording
Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $9.7 million and $29.9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases 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 interface chip products. Cost of product revenue increased approximately $3.1 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to higher sales volumes of our memory interface chips.
Previous wording
In the near term, we expect costs of product revenue to fluctuate due to changes in product mix and the timing of orders.
Current wording
In the near term, we expect costs of product revenue to fluctuate due to changes in sales volume and product mix.
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 $0.3 million and $0.6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. 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 increased $0.5 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to higher engineering services associated with the contracts.
Previous wording
Sales, general and administrative expenses include expenses and costs associated with trade shows, public relations, advertising, litigation, general legal, insurance and other sales, marketing and administrative efforts. Consistent with our business model, our licensing, sales, and marketing activities aim to develop or strengthen relationships with potential new and current customers. In addition, we work with current customers through marketing, sales and technical efforts to drive adoption of their products that use our innovations and solutions, by their customers. Due to the long business development cycles we face and the semi-fixed nature of sales, general and administrative expenses in a given period, these expenses generally do not correlate to the level of revenue in that period or in comparable recent or future periods.
Current wording
Sales, general and administrative expenses include expenses and costs associated with trade shows, public relations, advertising, litigation, general legal, insurance and other sales, marketing and administrative efforts. Consistent with our business model, our licensing, sales, and marketing activities aim to develop or strengthen relationships with potential new and current customers. In addition, we work with current customers through marketing, sales and technical efforts to drive adoption of their products that use our innovations and solutions, by system companies. Due to the long business development cycles we face and the semi-fixed nature of sales, general and administrative expenses in a given period, these expenses generally do not correlate to the level of revenue in that period or in comparable recent or future periods.
Previous wording
Amortization expense is related to various acquired IP.
Current wording
Amortization expense is related to various acquired IP. Amortization of acquired intangible assets recognized in cost of revenue was $1.7 million for each of the three months ended March 31, 2026 and 2025. No amortization of acquired intangible assets was recognized in operating expenses for either period.
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, 2025 and 2024, interest income and other income (expense), net, consisted primarily of interest income of $6.5 million and $4.8 million, respectively, generated from our investment portfolio. For the nine months ended September 30, 2025 and 2024, interest income and other income (expense), net, consisted primarily of interest income of $17.1 million and $13.6 million, respectively, generated from our investment portfolio. Interest income increased during the three and nine months ended September 30, 2025 as compared to the same periods in 2024 due to an increase in our investment portfolio, partially offset by a decline in interest rates on our investments.
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, 2026 and 2025, interest income and other income (expense), net, consisted primarily of interest income generated from our investment portfolio. Interest income increased during the three months ended March 31, 2026 as compared to the same period in 2025 due to an increase in our investment portfolio, partially offset by a decline in interest rates on our investments.
Previous wording
Interest expense is primarily associated with long-term software licenses. Interest expense remained flat for the three and nine months ended September 30, 2025 as compared to the same periods in 2024.
Current wording
Interest expense is primarily associated with long-term software licenses. Interest expense remained relatively flat for the three months ended March 31, 2026 as compared to the same period in 2025.
Previous wording
Our provision for income taxes for the three and nine months ended September 30, 2025 was primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2025, offset by tax benefits from excess stock-based compensation deductions. Our provision for income taxes for the three and nine months ended September 30, 2025 reflected effective tax rates of 30.2% and 18.6%, respectively, and includes the impact from the tax legislation, referred to as the One Big Beautiful Bill Act (“OBBBA”), which was enacted in the third quarter of 2025 and is further discussed below. 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 effective tax rates of 17.6% and
Current wording
Our provisions for income taxes for the three months ended March 31, 2026 and 2025 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2026 and 2025, respectively, offset by tax benefits from excess stock-based compensation deductions. Our provision for income taxes for the three months ended March 31, 2026 and 2025 reflected effective tax rates of 12.8% and 10.8%, respectively, and differed from the U.S. statutory rate primarily due to tax benefits from excess stock-based compensation deductions.
Previous wording
During each of the three months ended September 30, 2025 and 2024, we paid foreign withholding taxes of $5.1 million. During the nine months ended September 30, 2025 and 2024, we paid foreign withholding taxes of $16.1 million and $15.5 million, respectively.
Current wording
During the three months ended March 31, 2026 and 2025, we paid foreign withholding taxes of $5.5 million and $5.6 million, respectively.
Previous wording
On July 4, 2025, the United States enacted federal tax legislation commonly referred to as the OBBBA. 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, there was an increase to our tax expense, primarily related to changes in the taxation of profits derived from foreign operations, and more specifically, the foreign-derived intangible income deduction. We project our effective tax rate to increase in 2025 due to the impact from the new tax legislation, particularly related to the foreign-derived intangible income deduction.
Current wording
In the third quarter of 2025, the United States enacted federal tax legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). 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, there was an increase to our income tax expense in 2025, primarily related to changes in the taxation of profits derived from foreign operations and, more specifically, the foreign-derived intangible income deduction. The impact of OBBBA also increased our income tax expense and effective tax rate for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
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 majority of our cash and cash equivalents are in the United States. Our cash needs for the nine months ended September 30, 2025, 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 majority of our cash and cash equivalents are in the United States. Our cash needs for the three months ended March 31, 2026, 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. During the nine months ended September 30, 2025, 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, 2026, 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 $260.2 million for the nine months ended September 30, 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 nine months ended September 30, 2025 primarily included a decrease in accounts receivable and an increase in deferred revenue, offset by an increase in prepaid expenses and other current assets, as well as decreases in accounts payable, accrued salaries and benefits and other current liabilities. Additionally, changes in operating assets and liabilities excludes the impact of the non-cash write-down of income taxes receivable and offsetting income taxes payable of $118.9 million (including interest) related to South Korea withholding taxes as discussed in “Provision for Income Taxes” section above.
Current wording
Cash provided by operating activities of $83.2 million for the three months ended March 31, 2026 was primarily attributable to cash generated from product sales, customer licensing and engineering services fees. Changes in operating assets and liabilities for the three months ended March 31, 2026 primarily included a decrease in accounts receivable, offset by an increase in inventories and decreases in accrued salaries and benefits and other liabilities, and deferred revenue.
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 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 used in investing activities of $231.4 million for the nine months ended September 30, 2025, consisted of purchases of available-for-sale marketable securities of $498.2 million and $20.3 million paid to acquire property and equipment, offset by proceeds from the maturities of available-for-sale marketable securities of $287.1 million.
Current wording
Cash used in investing activities of $85.3 million for the three months ended March 31, 2026, consisted of purchases of available-for-sale marketable securities of $255.8 million and $11.6 million paid to acquire property and equipment, offset by proceeds from the maturities of available-for-sale marketable securities of $182.1 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 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 used in financing activities of $49.9 million for the nine months ended September 30, 2025, was primarily due to $37.6 million in payments of taxes on restricted stock units, $10.2 million paid under installment payment arrangements to acquire fixed assets and an aggregate payment of $5.8 million as part of our share repurchases in 2025, offset by $3.7 million in proceeds from the issuance of common stock under equity incentive plans.
Current wording
Cash used in financing activities of $46.3 million for the three months ended March 31, 2026, was primarily due to $38.4 million in payments of taxes related to net share settlement of equity awards, $5.3 million paid under installment payment arrangements to acquire fixed assets and an aggregate payment of $2.6 million as part of our share repurchases in the first quarter of 2026.
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 share repurchases in 2024 (includes $0.2 million in fees related to an 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 $36.8 million for the three months ended March 31, 2025, was primarily due to $30.8 million in payments of taxes related to net share settlement of equity awards, $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
The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $25.2 million, including $23.9 million recorded as a reduction of long-term deferred tax assets and $1.3 million in long-term income taxes payable as of September 30, 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.
Current wording
The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $26.0 million, including $24.7 million recorded as a reduction of long-term deferred tax assets and $1.3 million in long-term income taxes payable as of March 31, 2026. 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
During the nine months ended September 30, 2025, we entered into share repurchase plans (the “Buying Plans”) with Mizuho Securities USA, LLC (“Mizuho”), pursuant to which Mizuho will repurchase shares of our common stock from February 6, 2025 through December 31, 2025, with provisions to terminate sooner. The Buying Plans are part of the 2020 Repurchase Program. The execution of share repurchases is dependent on our stock price reaching certain levels. During the nine months ended September 30, 2025, we 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.
Current wording
During the three months ended March 31, 2026, we continued to operate under a share repurchase plan with Mizuho Securities USA, LLC, which was entered into in 2025 and expired on March 31, 2026. The execution of share repurchases was dependent on our stock price reaching certain levels. During the three months ended March 31, 2026 and 2025, we repurchased an immaterial amount of shares under the 2020 Repurchase Program, which were retired and recorded as a reduction to stockholders’ equity.
Previous wording
As of September 30, 2025, there remained an outstanding authorization to repurchase approximately 5.6 million shares of our outstanding common stock under the 2020 Repurchase Program.
Current wording
As of March 31, 2026, there remained an outstanding authorization to repurchase approximately 5.5 million shares of our outstanding common stock under the 2020 Repurchase Program.
Previous wording
The discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, investments, income taxes, litigation and other contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates include those regarding (1) revenue recognition, (2) goodwill, (3) intangible assets, (4) income taxes, and (5) business combinations. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
The discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, investments, income taxes, litigation and other contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates include those regarding (1) revenue recognition, (2) goodwill, (3) intangible assets, and (4) income taxes. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
14.6%, respectively. For both 2025 and 2024, our effective tax rates differed from the U.S. statutory rate primarily due to tax benefits from excess stock-based compensation deductions.