• Annual Product Revenue: $247 million, a record for the company.
• Cash from Operations: $231 million in 2024, up from $196 million in 2023.
• Q4 Revenue: $161.1 million, above the high end of expectations.
• Q4 Product Revenue: $73.4 million, up 11% sequentially and 37% year over year.
• Royalty Revenue: $58.2 million in Q4.
• Licensing Billings: $63.6 million in Q4.
• Operating Costs: $89.2 million in Q4, including cost of goods sold.
• Non-GAAP Net Income: $59.6 million for Q4.
• Cash, Cash Equivalents, and Marketable Securities: $481.8 million at the end of Q4.
• Free Cash Flow: $48.8 million in Q4.
• Q1 2025 Revenue Guidance: Between $156 million and $162 million.
• Q1 2025 Non-GAAP Earnings Per Share Guidance: Between $0.51 and $0.59.

• Warning! GuruFocus has detected 3 Warning Sign with RMBS.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rambus Inc (NASDAQ:RMBS) achieved record quarterly results from memory interface chips, contributing to an annual record for product revenue of $247 million.
• The company completed a strategic extension of its patent licensing agreement with Micron through 2029, strengthening its long-term licensing foundation.
• Rambus Inc (NASDAQ:RMBS) generated a new annual high for cash from operations, totaling $231 million in 2024.
• The company introduced a record number of new chip products in 2024, expanding its product portfolio and market opportunities.
• Rambus Inc (NASDAQ:RMBS) reported strong demand for its DDR5 RCD products, driven by data center growth and continued market share gains.

Negative Points

• The company faces challenges with the chaotic ramp of DDR5 in the market due to the complexity of making chips work together.
• Rambus Inc (NASDAQ:RMBS) anticipates a small quarterly difference between licensing billings and royalty revenue due to timing issues.
• The contribution from companion chips remains modest, with significant revenue impact expected only in the second half of 2025.
• The company is experiencing increased operating expenses due to continued investment in R&D for new product developments.
• Rambus Inc (NASDAQ:RMBS) is still monitoring the impact of new market entrants like NVIDIA's Grace architecture on its business.

Q & A Highlights

Q: Can you characterize the demand perspective in the end markets, particularly for server DRAM, DIM solutions? Any thoughts on current inventory levels for DDR5 solutions? A: We see the market recovering somewhat in the second half of 2024, with pent-up demand for traditional servers driving growth in our buffer chip business. Server demand is expected to grow mid to upper single digits in 2025. DDR4 demand remains low, but DDR5 demand is strong, and we expect further growth in Q1.

Q: How should we think about the growth in product revenue, particularly with the opportunity for companion chip expansion? A: We see nice growth quarter over quarter, with contributions from companionship starting to kick in. The bulk of growth is still driven by DDR5 RCD. We expect an inflection point in the second half of the year with the next Intel platform, leading to a profile similar to 2024, with double-digit growth continuing.

Q: Are there any issues with your power management IC, and how does it affect your expectations for revenue? A: We are aware of issues with a power management chip in the market, but it is not our chip. We have no issues with our power management chip launch. The impact on our revenue expectations is minimal, and we remain confident in our technology's importance for future growth.

Q: How do you view the market share gains in 2024 for your memory interface chip business, and what are your expectations for 2025? A: We saw market growth in mid-single digits, and we grew 10%, indicating market share gains. We believe we hold early 40% market share in DDR5 and expect continued traction in 2025.

Q: How do you see the role of MRDIMM evolving, and is it still a 2026 story? A: We are excited about the MRDIMM opportunity, which will align with Intel's Diamond Rapids platform in the second half of 2026. The demand for MRDIMM remains strong, driven by the need for more memory and speed in AI servers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.