Rambus Investor Presentation Q4 2019
Safe Harbor for Forward-Looking Statements; Other Disclosures This presentation contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 including Rambus’ financial guidance for future periods, product and investment strategies, timing of expected product launches, demand for existing and newly- acquired technologies, the growth opportunities of the various markets we serve, the expected benefits of our merger, acquisition and divestiture activity, including the expected timing of transaction completions and the success of our integration efforts, and the effects of ASC 606 on reported revenue, amongst other things. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by Rambus’ management. Actual results may differ materially. Our business is subject to a number of risks which are described more fully in our periodic reports filed with the Securities and Exchange Commission. Rambus undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers in ASC 606. The adoption of ASC 606 materially impacted the timing of revenue recognition for the Company's fixed-fee intellectual property licensing arrangements. The adoption of ASC 606 did not have a material impact on the Company's other revenue streams, net cash provided by operating activities, or its underlying financial position. This presentation contains non-GAAP financial measures, including operating costs and expenses, interest and other income (expense), net and diluted net income (loss) per share. In computing these non-GAAP financial measures, stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, non-cash interest expense and certain other one-time adjustments were considered. The non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. Reconciliation from GAAP to non-GAAP results are made available and more fully described on our website as well as the back of this deck and in the earnings release. CONFIDENTIAL CO 2
Rambus at a Glance Who We Are Rambus Offerings Financial Performance Re Revenue Premier si silicon on IP IP a and c chip • Architecture High-speed IO & DPA Q319: $57.4M provider, making da data faster Countermeasures Licenses an and safer 2018: $231.2M $401.1M (ASC 605) Developed fo foundational • Memory Interface Chips te technology for all modern Chips Ca Cash from Operations computing systems Q319: $25.6M Improving pe performanc nce, • High-speed Interface 2019 YTD: $93.1M capacity and security for ca Silicon IP and Security IP leading SoCs and systems 2018: $87.1M HQ: 2600 + California Ca 30 Y 30 Years 2600 ~ 850 850 NASDAQ: RMBS RM Employees Tech leadership Patents and WW Offices in Worldwide & innovation Applications India, EU, Asia 3
All Growth Markets Are Impacted by These Megatrends Ar Artificial Intelligence Da Data Center Explosion of data from connect devices and real- Accurate training requires enormous amounts time processing needs pushing demands on of data - memory bandwidth is key interconnects to move data faster Autonomous/AD Au ADAS AS Au Automotive Ed Edge Compute (5G) Real-time decisions from multiple inputs Near edge (base stations) drive increase demand on processing and trust performance and far edge (gateways and in the data routers) demand power efficiency and trust Internet of Things Defense Billions of connected endpoints make device-level Trusted device authentication is critical security critical to enabling trust across the ecosystem to global supply chain 4
Semiconductor Industry Ecosystem Built on Leading-Edge IP Markets AI/ML AI Data Dat a Center Au Automotive Communications Co Io IoT Go Government Cloud Providers System OEMs Memory SoC Chip Makers Foundry Technology Suppliers Ecosystem Example 5
Semiconductor Solutions Built on Leading-Edge IP Architecture Silicon IP Chips License Security IP: Interface IP: Memory 2400+ issued & Foundational Secure Cores and Memory and SerDes Interface pending patents IP Provisioning PHYs and Controllers Chips 6
Silicon IP: Security Protecting semiconductors and their secrets Secure Silicon IP from design and manufacturing through deployment and end-of-life DPA Root of Crypto Anti- Cores and Trust Accelerators Counterfeiting Workstation Secure Provisioning Key and Data Device Key Provisioning Management 7
Complementary Portfolio Extends Market Reach and Depth Se Secu cure Secu Se cure Secu Se cure Si Silicon IP So Software Pr Provisioning Pr Protoco cols Securing Data Securing Data at Rest in Motion Key Markets Data Center Networking Data Center Military • • • • AI + ML IoT Edge Automotive • • • • Automotive Edge Data Center • • • • Military • AI + ML 8
Silicon IP: High-speed Interfaces High-speed memory and SerDes interfaces are pervasive Memory PHY + Digital Controller in modern computing and critical to performance in data- intensive applications DDR5 DDR4/3 HBM2 GDDR6 Backplane Interconnects & HBM3 28nm & 14nm 14nm • 112G – LR • 100/200/400GbE • 56G – LR • 128GFC Device Interconnects Memory • USB3/4 Interconnects SerDes PHY + Digital Controller • SATA • HBM2 • SAS • GDDR5/6 • DDR3/4 Chip-to-Chip 16G • LPDDR3/4 112G 28G 56G Interconnects • PCIe 3/4/5 28nm & • 112G – MR, 14nm 10nm 7nm Chiplet Interconnects 14nm VSR • 112 – XSR • 56G – MR • 56 - XSR • 28G – MR 9
Complementary Physical and Digital IP Portfolios DDR DDR4 GD GDDR6 HB HBM2 PC PCIe MI MIPI PHYs Controllers Data Center Data Center Data Center Data Center IoT • • • • • Networking Networking Networking Networking Mobile • • • • • Edge Automotive AI + ML Edge • • • • Markets Automotive AI + ML Automotive • • • AI + ML AI + ML • • IoT IoT • • 10
Memory Interface Chips Server DIMM Chipsets: enabling performance and capacity Memory buffers are the key to expanding capacity for data centers DDR3 DDR4 NV DDR5 and high-performance computing DB & RCD DB & RCD DDR4 NVRCD DB & RCD Registered DIMM (RDIMM) Register Clock Driver (RCD) DRAM DRAM DRAM DRAM DRAM DRAM DRAM DRAM DRAM RCD Da ta Cloc Command/Ad k dress Load Reduced DIMM (LRDIMM) RCD DRAM DRAM DRAM DRAM DRAM DRAM DRAM DRAM DRAM RCD Data Buffer DB DB DB DB DB DB DB DB DB Da ta Cloc Command/Ad k dress 11
Products Driving Growth In Thousands Compelling Product Revenue Growth Trajectory $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Product (Buffer Chip) Contract & Other (Silicon IP) Other (RLD, Payments & Ticketing) Silicon IP growth driven by design win momentum and acquisitions • Buffer Chip market share gains expected to continue through DDR4 ramp and DDR5 introduction • Strong systematic growth in Buffer Chip and Silicon IP product revenue offsets structural declines in Patent Licensing • Predictability of long-term licensing agreements with key industry partners provides strong cash flow and stability • 12
Key Financial Metrics ASC 606 AS AS ASC 606 AS ASC 606 AS ASC 606 AS ASC 606 Q3 2018 Q3 Q4 2018 Q4 Q1 Q1 2019 Q2 Q2 2019 Q3 Q3 2019 In Millions Driven by the structure and timing of key Revenue $59.8 $68.5 $48.4 $58.3 $57.4 deals. Year over year growth from product revenue Managed expenses through refocus on core growth initiatives. Adoption of ASC 842 in Total Operating Expenses 1 $67.6 $61.6 $67.3 $64.1 $67.1 Q1’19 increased operating expense with corresponding decrease in interest expense Operating results under ASC 606 do not Operating Income (Loss) 1 ($7.9) $6.9 ($18.9) ($5.8) ($9.7) reflect significant cash flow from fixed-fee licensing arrangements Consistent performance in line with Cash from Operations $31.6 $35.1 $28.8 $38.7 $25.6 expectations ¹Please refer to reconciliations of non-GAAP financial measures included in this presentation and in our earnings release 13
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