Rambus Reports 38.2% Revenue Growth in Q3 2024, Despite Decline in Net Income

Rambus Inc. reported significant financial developments in its Q3 2024 10-Q filing, highlighting a robust increase in revenue and strategic adjustments. For the three months ended September 30, 2024, total revenue reached $145.5 million, a 38.2% increase from $105.3 million in the same period of 2023. This growth was driven by a substantial rise in royalty revenue, which surged 122.1% to $64.1 million, compared to $28.9 million in Q3 2023. Product revenue also increased, totaling $66.4 million, up from $52.2 million year-over-year.

Despite the revenue growth, net income for Q3 2024 was $48.7 million, a decline from $103.2 million in Q3 2023. This decrease in profitability was attributed to higher operating expenses, which totaled $62.7 million, and a significant drop in operating income to $54.7 million from $104.9 million in the prior year. The gross profit margin improved to 80.7%, up from 77.2% in Q3 2023, indicating better cost management in product sales.

For the nine months ended September 30, 2024, total revenue was $395.5 million, a 16.7% increase from $338.9 million in the same period of 2023. However, net income for this period fell to $117.6 million from $275.4 million in the previous year, reflecting the impact of the 2023 Restructuring Plan, which included a workforce reduction of 42 employees and associated costs of approximately $9.4 million.

Rambus also engaged in strategic transactions, including the sale of its PHY IP group to Cadence Design Systems for $110 million, completed in September 2023. This divestiture resulted in a net gain of approximately $90.8 million, which was recognized in the financial results for the nine months ended September 30, 2023. The company continues to focus on its core semiconductor business, with ongoing investments in research and development, which increased by approximately $3.9 million in Q3 2024.

As of September 30, 2024, Rambus reported cash and cash equivalents of $114.0 million, up from $94.8 million at the end of 2023. The company also maintained a strong investment portfolio, totaling $432.7 million, reflecting prudent cash management strategies. The share repurchase program remains active, with approximately 1.4 million shares repurchased for $63.1 million during the nine months ended September 30, 2024.

Overall, Rambus Inc. demonstrated resilience in revenue growth while navigating challenges in profitability and strategic restructuring, positioning itself for future opportunities in the semiconductor market.