false--12-31Q220190000917273P3YP1Y0.0010.0015000000005000000001090177081111274441090177081111274440.0550.0490.0490.011250.013750.01375P10YP10YP1YP3YP3YP10YP10YP1YP3YP3Y0.0010.0015000000500000000003280003420000.290.240.0270.026 0000917273 2019-01-01 2019-06-30 0000917273 us-gaap:AccountsReceivableMember 2019-01-01 2019-06-30 0000917273 rmbs:SalesNetMember 2019-01-01 2019-06-30 0000917273 2019-06-30 0000917273 2018-12-31 0000917273 us-gaap:ResearchAndDevelopmentExpenseMember 2019-04-01 2019-06-30 0000917273 us-gaap:CostOfSalesMember 2019-04-01 2019-06-30 0000917273 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-01-01 2018-06-30 0000917273 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-06-30 0000917273 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-04-01 2019-06-30 0000917273 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-06-30 0000917273 us-gaap:CostOfSalesMember 2018-04-01 2018-06-30 0000917273 us-gaap:ResearchAndDevelopmentExpenseMember 2018-04-01 2018-06-30 0000917273 us-gaap:ResearchAndDevelopmentExpenseMember 2018-01-01 2018-06-30 0000917273 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-04-01 2018-06-30 0000917273 us-gaap:CostOfSalesMember 2019-01-01 2019-06-30 0000917273 us-gaap:CostOfSalesMember 2018-01-01 2018-06-30 0000917273 2019-04-01 2019-06-30 0000917273 rmbs:ContractandotherRevenueMember 2019-01-01 2019-06-30 0000917273 2018-01-01 2018-06-30 0000917273 rmbs:ProductRevenueMember 2019-01-01 2019-06-30 0000917273 2018-04-01 2018-06-30 0000917273 rmbs:ContractandotherRevenueMember 2018-04-01 2018-06-30 0000917273 rmbs:ProductRevenueMember 2019-04-01 2019-06-30 0000917273 rmbs:ContractandotherRevenueMember 2019-04-01 2019-06-30 0000917273 us-gaap:RoyaltyMember 2018-04-01 2018-06-30 0000917273 rmbs:ProductRevenueMember 2018-01-01 2018-06-30 0000917273 rmbs:ProductRevenueMember 2018-04-01 2018-06-30 0000917273 rmbs:ContractandotherRevenueMember 2018-01-01 2018-06-30 0000917273 us-gaap:RoyaltyMember 2018-01-01 2018-06-30 0000917273 us-gaap:RoyaltyMember 2019-04-01 2019-06-30 0000917273 us-gaap:RoyaltyMember 2019-01-01 2019-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0000917273 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0000917273 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000917273 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0000917273 us-gaap:RetainedEarningsMember 2019-06-30 0000917273 2018-03-31 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0000917273 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 2019-06-30 0000917273 us-gaap:CommonStockMember 2018-01-01 2018-06-30 0000917273 us-gaap:CommonStockMember 2019-03-31 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000917273 us-gaap:CommonStockMember 2018-12-31 0000917273 us-gaap:CommonStockMember 2019-01-01 2019-06-30 0000917273 us-gaap:RetainedEarningsMember 2017-12-31 0000917273 us-gaap:RetainedEarningsMember 2018-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-06-30 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000917273 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-06-30 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000917273 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-01-01 2018-06-30 0000917273 us-gaap:RetainedEarningsMember 2019-03-31 0000917273 us-gaap:CommonStockMember 2017-12-31 0000917273 us-gaap:CommonStockMember 2018-06-30 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000917273 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000917273 us-gaap:EquitySecuritiesMember us-gaap:RetainedEarningsMember 2018-01-01 2018-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0000917273 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000917273 us-gaap:RetainedEarningsMember 2018-03-31 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0000917273 2017-12-31 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0000917273 us-gaap:AccountingStandardsUpdate201602Member us-gaap:RetainedEarningsMember 2019-01-01 2019-06-30 0000917273 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000917273 us-gaap:CommonStockMember 2018-03-31 0000917273 us-gaap:CommonStockMember 2019-06-30 0000917273 us-gaap:RetainedEarningsMember 2018-01-01 2018-06-30 0000917273 2019-03-31 0000917273 us-gaap:EquitySecuritiesMember 2018-01-01 2018-06-30 0000917273 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000917273 2018-06-30 0000917273 us-gaap:RetainedEarningsMember 2019-01-01 2019-06-30 0000917273 us-gaap:RetainedEarningsMember 2018-12-31 0000917273 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000917273 2019-01-01 0000917273 srt:MinimumMember 2019-06-30 0000917273 srt:MaximumMember 2019-06-30 0000917273 srt:MinimumMember 2019-01-01 2019-06-30 0000917273 srt:MaximumMember 2019-01-01 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2018-04-01 2018-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0000917273 us-gaap:CustomerContractsMember 2018-12-31 0000917273 us-gaap:NoncompeteAgreementsMember 2018-12-31 0000917273 us-gaap:InProcessResearchAndDevelopmentMember 2018-12-31 0000917273 us-gaap:DevelopedTechnologyRightsMember 2018-12-31 0000917273 us-gaap:CustomerContractsMember 2019-06-30 0000917273 us-gaap:NoncompeteAgreementsMember 2019-06-30 0000917273 us-gaap:DevelopedTechnologyRightsMember 2019-06-30 0000917273 us-gaap:InProcessResearchAndDevelopmentMember 2019-06-30 0000917273 rmbs:MidSegmentMember 2019-06-30 0000917273 rmbs:RSDMemberDomain 2019-01-01 2019-06-30 0000917273 rmbs:MidSegmentMember 2018-12-31 0000917273 rmbs:RSDMemberDomain 2019-06-30 0000917273 rmbs:MidSegmentMember 2019-01-01 2019-06-30 0000917273 rmbs:RSDMemberDomain 2018-12-31 0000917273 rmbs:FavorableContractsMember 2018-12-31 0000917273 rmbs:FavorableContractsMember 2019-01-01 2019-06-30 0000917273 rmbs:FavorableContractsMember 2018-04-01 2018-06-30 0000917273 rmbs:FavorableContractsMember 2019-04-01 2019-06-30 0000917273 rmbs:FavorableContractsMember 2018-01-01 2018-06-30 0000917273 us-gaap:AllOtherSegmentsMember 2019-06-30 0000917273 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0000917273 us-gaap:NoncompeteAgreementsMember 2018-01-01 2018-12-31 0000917273 us-gaap:NoncompeteAgreementsMember 2019-01-01 2019-06-30 0000917273 srt:MaximumMember us-gaap:CustomerContractsMember 2019-01-01 2019-06-30 0000917273 srt:MaximumMember us-gaap:CustomerContractsMember 2018-01-01 2018-12-31 0000917273 srt:MinimumMember us-gaap:CustomerContractsMember 2019-01-01 2019-06-30 0000917273 srt:MinimumMember us-gaap:CustomerContractsMember 2018-01-01 2018-12-31 0000917273 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2018-01-01 2018-12-31 0000917273 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2018-01-01 2018-12-31 0000917273 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0000917273 us-gaap:OperatingSegmentsMember 2019-04-01 2019-06-30 0000917273 us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0000917273 rmbs:RSDMemberDomain 2019-04-01 2019-06-30 0000917273 rmbs:MidSegmentMember 2019-04-01 2019-06-30 0000917273 us-gaap:OperatingSegmentsMember 2019-01-01 2019-06-30 0000917273 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0000917273 us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0000917273 rmbs:RSDMemberDomain 2018-04-01 2018-06-30 0000917273 rmbs:MidSegmentMember 2018-01-01 2018-06-30 0000917273 rmbs:RSDMemberDomain 2018-01-01 2018-06-30 0000917273 us-gaap:OperatingSegmentsMember 2018-01-01 2018-06-30 0000917273 us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0000917273 us-gaap:OperatingSegmentsMember 2018-04-01 2018-06-30 0000917273 rmbs:MidSegmentMember 2018-04-01 2018-06-30 0000917273 rmbs:CustomerCMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0000917273 rmbs:CustomeraMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0000917273 rmbs:CustomerDMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0000917273 rmbs:CustomerEMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0000917273 rmbs:CustomerFMemberDomain rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0000917273 rmbs:CustomerCMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0000917273 rmbs:CustomerGMemberDomain rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-06-30 0000917273 rmbs:CustomerDMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-06-30 0000917273 rmbs:CustomerBMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0000917273 rmbs:CustomerBMember rmbs:SalesNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0000917273 rmbs:Customer3Member us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-12-31 0000917273 rmbs:Customer2Member us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-06-30 0000917273 rmbs:Customer1Member us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-06-30 0000917273 rmbs:Customer1Member us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-12-31 0000917273 country:US 2018-01-01 2018-06-30 0000917273 srt:EuropeMember 2019-04-01 2019-06-30 0000917273 country:SG 2018-04-01 2018-06-30 0000917273 country:TW 2018-01-01 2018-06-30 0000917273 country:CA 2019-04-01 2019-06-30 0000917273 rmbs:AsiaOtherMember 2018-01-01 2018-06-30 0000917273 srt:EuropeMember 2018-01-01 2018-06-30 0000917273 country:KR 2018-01-01 2018-06-30 0000917273 srt:EuropeMember 2019-01-01 2019-06-30 0000917273 country:SG 2018-01-01 2018-06-30 0000917273 country:CA 2018-04-01 2018-06-30 0000917273 rmbs:AsiaOtherMember 2018-04-01 2018-06-30 0000917273 country:JP 2018-04-01 2018-06-30 0000917273 country:CA 2018-01-01 2018-06-30 0000917273 country:KR 2019-04-01 2019-06-30 0000917273 country:JP 2019-01-01 2019-06-30 0000917273 rmbs:AsiaOtherMember 2019-04-01 2019-06-30 0000917273 rmbs:AsiaOtherMember 2019-01-01 2019-06-30 0000917273 country:US 2018-04-01 2018-06-30 0000917273 country:TW 2018-04-01 2018-06-30 0000917273 country:JP 2018-01-01 2018-06-30 0000917273 country:CA 2019-01-01 2019-06-30 0000917273 country:US 2019-04-01 2019-06-30 0000917273 country:TW 2019-01-01 2019-06-30 0000917273 country:SG 2019-01-01 2019-06-30 0000917273 country:JP 2019-04-01 2019-06-30 0000917273 country:US 2019-01-01 2019-06-30 0000917273 country:SG 2019-04-01 2019-06-30 0000917273 country:KR 2019-01-01 2019-06-30 0000917273 country:KR 2018-04-01 2018-06-30 0000917273 srt:EuropeMember 2018-04-01 2018-06-30 0000917273 country:TW 2019-04-01 2019-06-30 0000917273 us-gaap:MoneyMarketFundsMember 2019-06-30 0000917273 us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:MoneyMarketFundsMember 2018-12-31 0000917273 us-gaap:CashEquivalentsMember 2019-06-30 0000917273 us-gaap:ShortTermInvestmentsMember 2018-12-31 0000917273 us-gaap:ShortTermInvestmentsMember 2019-06-30 0000917273 us-gaap:CashEquivalentsMember 2018-12-31 0000917273 2018-01-01 2018-12-31 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember 2019-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember 2018-12-31 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2018-12-31 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0000917273 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000917273 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0000917273 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentShorttermDebtSecuritiesMember 2019-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember us-gaap:ConvertibleNotesPayableMember 2019-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember us-gaap:ConvertibleNotesPayableMember 2018-12-31 0000917273 rmbs:ConvertibleSeniorNotesMember 2019-06-30 0000917273 rmbs:ConvertibleSeniorNotesMember 2018-12-31 0000917273 rmbs:ConvertibleSeniorNotesMember 2019-06-30 0000917273 rmbs:ConvertibleSeniorNotesMember 2018-12-31 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember 2018-01-01 2018-06-30 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember 2019-01-01 2019-06-30 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember 2018-04-01 2018-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember rmbs:ConvertibleSeniorNotesMember 2018-01-01 2018-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember rmbs:ConvertibleSeniorNotesMember 2018-04-01 2018-06-30 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember 2019-04-01 2019-06-30 0000917273 us-gaap:ConvertibleNotesPayableMember 2018-04-01 2018-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember rmbs:ConvertibleSeniorNotesMember 2019-04-01 2019-06-30 0000917273 us-gaap:ConvertibleNotesPayableMember 2018-01-01 2018-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember rmbs:ConvertibleSeniorNotesMember 2019-01-01 2019-06-30 0000917273 us-gaap:ConvertibleNotesPayableMember 2019-04-01 2019-06-30 0000917273 us-gaap:ConvertibleNotesPayableMember 2019-01-01 2019-06-30 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember us-gaap:ConvertibleNotesPayableMember 2018-06-30 0000917273 rmbs:SeniorOnePointThreeSevenFivePercentConvertibleNotesDueTwoThousandTwentyThreeMemberMember us-gaap:ConvertibleNotesPayableMember 2018-06-30 0000917273 rmbs:SeniorOnePointOneTwoFivePercentConvertibleNotesDueTwoThousandEighteenMember us-gaap:ConvertibleNotesPayableMember 2018-06-30 0000917273 us-gaap:ConvertibleNotesPayableMember 2019-06-30 0000917273 us-gaap:OtherCommitmentsDomain 2019-06-30 0000917273 us-gaap:SoftwareLicenseArrangementMember 2019-06-30 0000917273 rmbs:InterestPaymentRelatedToConvertibleNotesMember 2019-06-30 0000917273 us-gaap:LeasingArrangementMember 2018-12-31 0000917273 rmbs:ImputedFinancingObligationMember 2018-12-31 0000917273 us-gaap:LeasesAcquiredInPlaceMember 2018-12-31 0000917273 us-gaap:EmployeeStockOptionMember 2018-04-01 2018-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0000917273 us-gaap:StockCompensationPlanMember 2018-12-31 0000917273 us-gaap:StockCompensationPlanMember 2019-06-30 0000917273 us-gaap:StockCompensationPlanMember 2019-01-01 2019-06-30 0000917273 us-gaap:EmployeeStockMember 2019-01-01 2019-06-30 0000917273 us-gaap:EmployeeStockMember 2018-01-01 2018-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2018-12-31 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2019-04-01 2019-06-30 0000917273 us-gaap:EmployeeStockMember 2019-06-30 0000917273 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0000917273 us-gaap:EmployeeStockMember 2019-04-01 2019-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2018-04-01 2018-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2019-01-01 2019-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2019-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember us-gaap:DirectorMember 2019-01-01 2019-06-30 0000917273 rmbs:PotentialAdditionalPerformanceStockUnitsDomain 2019-01-01 2019-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2018-01-01 2018-06-30 0000917273 us-gaap:EmployeeStockMember 2018-04-01 2018-06-30 0000917273 rmbs:RestrictedStockAndStockUnitsMember 2018-12-31 0000917273 srt:MaximumMember us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0000917273 srt:MinimumMember us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0000917273 2015-01-21 0000917273 us-gaap:ForeignCountryMember 2019-01-01 2019-06-30 0000917273 us-gaap:ForeignCountryMember 2019-04-01 2019-06-30 0000917273 rmbs:LongTermIncomeTaxesPayableMember 2019-06-30 0000917273 us-gaap:ForeignCountryMember 2018-01-01 2018-06-30 0000917273 rmbs:LongTermIncomeTaxesPayableMember 2018-12-31 0000917273 rmbs:LongTermDeferredTaxAssetsMember 2019-06-30 0000917273 rmbs:LongTermDeferredTaxAssetsMember 2018-12-31 0000917273 us-gaap:ForeignCountryMember 2018-04-01 2018-06-30 0000917273 rmbs:PaymentsandTicketingbusinessMember rmbs:RSDMemberDomain 2019-06-30 0000917273 us-gaap:CorporateMember 2019-04-01 2019-06-30 0000917273 us-gaap:SubsequentEventMember 2019-07-08 0000917273 us-gaap:SubsequentEventMember 2019-07-29 2019-07-29 xbrli:pure iso4217:USD iso4217:USD xbrli:shares xbrli:shares utreg:sqft
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
_______________________________
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 000-22339
_______________________________
RAMBUS INC.
(Exact name of registrant as specified in its charter)
_______________________________
Delaware
 
94-3112828
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
1050 Enterprise Way
 
94089
Suite 700
 
 
Sunnyvale
,
California
 
 
(Address of principal executive offices)
 
(ZIP Code)
Registrant’s telephone number, including area code:
(408462-8000
________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, $.001 Par Value
RMBS
The NASDAQ Stock Market LLC
 
 
(The NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act:
None
________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Table of Contents

Large accelerated filer
 ☒
 
Accelerated filer
 
 
 
 
 
Non-accelerated filer
 
Smaller reporting company
 
 
 
 
 
Emerging growth company
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).  Yes   No 
The number of shares outstanding of the registrant’s Common Stock, par value $.001 per share, was 111,127,444 as of June 30, 2019.


Table of Contents

RAMBUS INC.
TABLE OF CONTENTS
 
 
PAGE
Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2019 and 2018
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018

3

Table of Contents

NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements include, without limitation, predictions regarding the following aspects of our future:
Success in the markets of our products and services or our customers’ products;
Sources of competition;
Research and development costs and improvements in technology;
Sources, amounts and concentration of revenue, including royalties;
Success in signing and renewing license agreements;
Terms of our licenses and amounts owed under license agreements;
Technology product development;
Dispositions, acquisitions, mergers or strategic transactions and our related integration efforts;
Impairment of goodwill and long-lived assets;
Pricing policies of our customers;
Changes in our strategy and business model, including the expansion of our portfolio of inventions, products, software, services and solutions to address additional markets in memory, chip, mobile payments, smart ticketing and security;
Deterioration of financial health of commercial counterparties and their ability to meet their obligations to us;
Effects of security breaches or failures in our or our customers’ products and services on our business;
Engineering, sales and general and administration expenses;
Contract revenue;
Operating results;
International licenses, operations and expansion;
Effects of changes in the economy and credit market on our industry and business;
Ability to identify, attract, motivate and retain qualified personnel;
Effects of government regulations on our industry and business;
Manufacturing, shipping and supply partners and/or sale and distribution channels;
Growth in our business;
Methods, estimates and judgments in accounting policies;
Adoption of new accounting pronouncements, including the adoption of the new leasing standard in 2019 on our financial position and results of operations;
Effective tax rates, including as a result of the new U.S. tax legislation;
Restructurings and plans of termination;
Realization of deferred tax assets/release of deferred tax valuation allowance;
Trading price of our common stock;
Internal control environment;
The level and terms of our outstanding debt and the repayment or financing of such debt;
Protection of intellectual property;
Any changes in laws, agency actions and judicial rulings that may impact the ability to enforce intellectual property rights;
Indemnification and technical support obligations;
Equity repurchase plans;
Issuances of debt or equity securities, which could involve restrictive covenants or be dilutive to our existing stockholders;

4

Table of Contents

Effects of fluctuations in currency exchange rates;
Outcome and effect of potential future intellectual property litigation and other significant litigation; and
Likelihood of paying dividends.
You can identify these and other forward-looking statements by the use of words such as “may,” “future,” “shall,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” “projecting” or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.
Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part II: Item 1A, “Risk Factors.” All forward-looking statements included in this document are based on our assessment of information available to us at this time. We assume no obligation to update any forward-looking statements.


5

Table of Contents

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
RAMBUS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

6

Table of Contents

 
June 30,
2019
 
December 31,
2018
 
(In thousands, except shares
and par value)
ASSETS
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
114,186

 
$
115,924

Marketable securities
223,532

 
161,840

Accounts receivable
28,225

 
50,863

Unbilled receivables
177,897

 
176,613

Inventories
9,326

 
6,772

Assets held for sale
78,388

 

Prepaids and other current assets
9,350

 
15,738

Total current assets
640,904

 
527,750

Intangible assets, net
29,748

 
59,936

Goodwill
153,144

 
207,178

Property, plant and equipment, net
41,590

 
57,028

Operating lease right-of-use assets
16,081

 

Deferred tax assets
4,399

 
4,435

Unbilled receivables, long-term
419,532

 
497,003

Other assets
6,763

 
7,825

Total assets
$
1,312,161

 
$
1,361,155

LIABILITIES & STOCKHOLDERS’ EQUITY
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
7,794

 
$
7,392

Accrued salaries and benefits
13,966

 
16,938

Deferred revenue
6,448

 
19,374

Income taxes payable, short-term
17,461

 
16,390

Operating lease liabilities
8,381

 

Liabilities held for sale
13,706

 

Other current liabilities
16,668

 
9,191

Total current liabilities
84,424

 
69,285

Convertible notes, long-term
145,314

 
141,934

Long-term imputed financing obligation

 
36,297

Long-term operating lease liabilities
9,548

 

Long-term income taxes payable
69,359

 
77,280

Other long-term liabilities
30,290

 
24,247

Total liabilities
338,935

 
349,043

Commitments and contingencies (Notes 11 and 15)


 


Stockholders’ equity:
 

 
 

Convertible preferred stock, $.001 par value:
 

 
 

Authorized: 5,000,000 shares
 

 
 

Issued and outstanding: no shares at June 30, 2019 and December 31, 2018

 

Common stock, $.001 par value:
 

 
 

Authorized: 500,000,000 shares
 

 
 

Issued and outstanding: 111,127,444 shares at June 30, 2019 and 109,017,708 shares at December 31, 2018
111

 
109

Additional paid-in capital
1,246,877

 
1,226,588

Accumulated deficit
(263,381
)
 
(204,294
)
Accumulated other comprehensive loss
(10,381
)
 
(10,291
)
Total stockholders’ equity
973,226

 
1,012,112

Total liabilities and stockholders’ equity
$
1,312,161

 
$
1,361,155

See Notes to Unaudited Condensed Consolidated Financial Statements

7

Table of Contents

RAMBUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) 

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2019
 
2018
 
2019
 
2018
 
(In thousands, except per share amounts)
Revenue:
 

 
 

 
 

 
 

Royalties
$
27,050

 
$
30,049

 
$
51,903

 
$
51,423

Product revenue
16,031

 
8,087

 
24,995

 
15,400

Contract and other revenue
15,216

 
18,322

 
29,783

 
36,061

Total revenue
58,297

 
56,458

 
106,681

 
102,884

Operating costs and expenses:
 

 
 

 
 

 
 

Cost of product revenue*
6,310

 
4,199

 
10,737

 
8,556

Cost of contract and other revenue
6,717

 
11,089

 
13,488

 
23,211

Research and development*
37,890

 
37,696

 
78,509

 
77,813

Sales, general and administrative*
24,908

 
24,483

 
52,553

 
54,681

Restructuring charges (recoveries)
2,528

 
(1,022
)
 
2,859

 
2,223

Impairment of assets held for sale
16,990

 

 
16,990

 

Total operating costs and expenses
95,343

 
76,445

 
175,136

 
166,484

Operating loss
(37,046
)
 
(19,987
)
 
(68,455
)
 
(63,600
)
Interest income and other income (expense), net
6,972

 
8,249

 
14,385

 
17,365

Interest expense
(2,534
)
 
(4,634
)
 
(4,805
)
 
(9,055
)
Interest and other income (expense), net
4,438

 
3,615

 
9,580

 
8,310

Loss before income taxes
(32,608
)
 
(16,372
)
 
(58,875
)
 
(55,290
)
Provision for (benefit from) income taxes
4,372

 
(1,015
)
 
4,681

 
(4,244
)
Net loss
$
(36,980
)
 
$
(15,357
)
 
$
(63,556
)
 
$
(51,046
)
Net loss per share:
 

 
 

 
 

 
 

Basic
$
(0.33
)
 
$
(0.14
)
 
$
(0.58
)
 
$
(0.47
)
Diluted
$
(0.33
)
 
$
(0.14
)
 
$
(0.58
)
 
$
(0.47
)
Weighted average shares used in per share calculation:
 

 
 

 
 

 
 

Basic
110,875

 
107,737

 
110,287

 
108,542

Diluted
110,875

 
107,737

 
110,287

 
108,542

_________________________________________
*    Includes stock-based compensation:
Cost of product revenue
$
1

 
$
2

 
$
2

 
$
5

Research and development
$
3,058

 
$
3,286

 
$
6,268

 
$
6,478

Sales, general and administrative
$
4,021

 
$
(1,400
)
 
$
7,999

 
$
2,919


See Notes to Unaudited Condensed Consolidated Financial Statements

8

Table of Contents

RAMBUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
(In thousands)
 
2019
 
2018
 
2019
 
2018
Net loss
 
$
(36,980
)
 
$
(15,357
)
 
$
(63,556
)
 
$
(51,046
)
Other comprehensive income (loss):
 
 

 
 

 
 

 
 

Foreign currency translation adjustment
 
(1,749
)
 
(4,660
)
 
(174
)
 
(1,771
)
Unrealized gain (loss) on marketable securities, net of tax
 
36

 
112

 
84

 
(692
)
Total comprehensive loss
 
$
(38,693
)
 
$
(19,905
)
 
$
(63,646
)
 
$
(53,509
)

See Notes to Unaudited Condensed Consolidated Financial Statements

9

Table of Contents

RAMBUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

 
For the Three Months Ended June 30, 2019
 
Common Stock
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Gain (Loss)
 
 
 
Shares
 
Amount
 
 
 
 
Total
 
(In thousands)
Balances at March 31, 2019
110,396

 
$
110

 
$
1,234,846

 
$
(226,401
)
 
$
(8,668
)
 
$
999,887

Net loss

 

 

 
(36,980
)
 

 
(36,980
)
Foreign currency translation adjustment

 

 

 

 
(1,749
)
 
(1,749
)
Unrealized gain on marketable securities, net of tax

 

 

 

 
36

 
36

Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
731

 
1

 
4,951

 

 

 
4,952

Stock-based compensation

 

 
7,080

 

 

 
7,080

Balances at June 30, 2019
111,127

 
$
111

 
$
1,246,877

 
$
(263,381
)
 
$
(10,381
)
 
$
973,226

 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended June 30, 2018
 
Common Stock
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Gain (Loss)
 
 
 
Shares
 
Amount
 
 
 
 
Total
 
(In thousands)
Balances at March 31, 2018
107,485

 
$
107

 
$
1,196,158

 
$
(74,255
)
 
$
(3,012
)
 
$
1,118,998

Net loss

 

 

 
(15,357
)
 

 
(15,357
)
Foreign currency translation adjustment

 

 

 

 
(4,660
)
 
(4,660
)
Unrealized gain on marketable securities, net of tax

 

 

 

 
112

 
112

Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
528

 
1

 
4,534

 

 

 
4,535

Repurchase and retirement of common stock under repurchase plan
(668
)
 
(1
)
 
7,741

 
(7,771
)
 

 
(31
)
Stock-based compensation

 

 
1,888

 

 

 
1,888

Balances at June 30, 2018
107,345

 
$
107

 
$
1,210,321

 
$
(97,383
)
 
$
(7,560
)
 
$
1,105,485

 
 
 
 
 
 
 
 
 
 
 
 

10

Table of Contents

 
For the Six Months Ended June 30, 2019
 
Common Stock
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Gain (Loss)
 
 
 
Shares
 
Amount
 
 
 
 
Total
 
(In thousands)
Balances at December 31, 2018
109,018

 
$
109

 
$
1,226,588

 
$
(204,294
)
 
$
(10,291
)
 
$
1,012,112

Net loss

 

 

 
(63,556
)
 

 
(63,556
)
Foreign currency translation adjustment

 

 

 

 
(174
)
 
(174
)
Unrealized gain on marketable securities, net of tax

 

 

 

 
84
 
84
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
2,109

 
2
 
6,020
 

 

 
6,022
Stock-based compensation

 

 
14,269
 

 

 
14,269

Cumulative effect adjustment from adoption of ASC 842

 

 

 
4,469

 

 
4,469

Balances at June 30, 2019
111,127

 
$
111

 
$
1,246,877

 
$
(263,381
)
 
$
(10,381
)
 
$
973,226

 
 
 
 
 
 
 
 
 
 
 
 
 
For the Six Months Ended June 30, 2018
 
Common Stock
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Gain (Loss)
 
 
 
Shares
 
Amount
 
 
 
 
Total
 
(In thousands)
Balances at December 31, 2017
109,764

 
$
110

 
$
1,212,798

 
$
(636,227
)
 
$
(5,097
)
 
$
571,584

Net loss

 

 

 
(51,046
)
 

 
(51,046
)
Foreign currency translation adjustment

 

 

 

 
(1,771
)
 
(1,771
)
Unrealized loss on marketable securities, net of tax

 

 

 

 
(692
)
 
(692
)
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
1,367

 
1

 
692

 

 

 
693

Repurchase and retirement of common stock under repurchase plan
(3,786
)
 
(4
)
 
(12,571
)
 
(37,456
)
 

 
(50,031
)
Stock-based compensation

 

 
9,402

 

 

 
9,402

Cumulative effect adjustment from adoption of ASU 2016-01

 

 

 
1,058

 

 
1,058

Cumulative effect adjustment from the adoption of ASC 606

 

 

 
626,288

 

 
626,288

Balances at June 30, 2018
107,345

 
$
107

 
$
1,210,321

 
$
(97,383
)
 
$
(7,560
)
 
$
1,105,485


See Notes to Unaudited Condensed Consolidated Financial Statements

11

Table of Contents

RAMBUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 
 
Six Months Ended
 
June 30,
 
2019
 
2018
 
(In thousands)
Cash flows from operating activities:
 

 
 

Net loss
$
(63,556
)
 
$
(51,046
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 

 
 

Stock-based compensation
14,269

 
9,402

Depreciation
9,932

 
5,529

Amortization of intangible assets
9,910

 
19,269

Non-cash interest expense and amortization of convertible debt issuance costs
3,379

 
5,396

Impairment of assets held for sale
16,990

 

Deferred income taxes
(266
)
 
(10,202
)
Non-cash restructuring

 
670

Loss on equity investment
175

 

Gain from sale of marketable equity security

 
(291
)
Gain from sale of assets held for sale

 
(1,266
)
Loss from disposal of property, plant and equipment
153

 
47

Change in operating assets and liabilities:
 

 
 

Accounts receivable
19,028

 
(13,665
)
Unbilled receivables
75,328

 
67,905

Prepaid expenses and other assets
4,636

 
(2,615
)
Inventories
(2,593
)
 
(1,040
)
Accounts payable
1,080

 
(798
)
Accrued salaries and benefits and other liabilities
(773
)
 
4,780

Income taxes payable
(6,966
)
 
(5,204
)
Deferred revenue
(8,740
)
 
(6,441
)
Operating lease liabilities
(4,526
)
 

Net cash provided by operating activities
67,460

 
20,430

Cash flows from investing activities:
 

 
 

Purchases of property, plant and equipment
(2,783
)
 
(5,287
)
Purchases of marketable securities
(277,706
)
 
(79,207
)
Maturities of marketable securities
216,382

 
131,823

Proceeds from sale of equity security

 
1,350

Proceeds from sale of assets held for sale

 
3,754

Investment in privately-held company
(1,000
)
 

Proceeds from sale of property, plant and equipment

 
10

Net cash provided by (used in) investing activities
(65,107
)
 
52,443

Cash flows from financing activities:
 
 
 
Proceeds received from issuance of common stock under employee stock plans
10,219

 
5,850

Principal payments against lease financing obligation

 
(499
)
Payments of taxes on restricted stock units
(4,271
)
 
(5,195
)
Payments under installment payment arrangement
(2,480
)
 

Repurchase and retirement of common stock, including prepayment under accelerated
share repurchase program

 
(50,031
)
Net cash provided by (used in) financing activities
3,468

 
(49,875
)
Effect of exchange rate changes on cash and cash equivalents

 
(558
)
Less: net decrease in cash classified within assets held for sale
(7,545
)
 


12

Table of Contents

Net increase (decrease) in cash, cash equivalents and restricted cash
(1,724
)
 
22,440

Cash, cash equivalents and restricted cash at beginning of period
116,252

 
225,844

Cash, cash equivalents and restricted cash at end of period
$
114,528

 
$
248,284

 
 
 
 
Non-cash investing and financing activities during the period:
 

 
 

Property, plant and equipment received and accrued in accounts payable and other liabilities
$
26,762

 
$
1,793

 
 
 
 
The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of June 30, 2019 and December 31, 2018:
 
 
 
 
June 30,
2019
 
December 31,
2018
Cash and cash equivalents
$
114,186

 
$
115,924

Restricted cash
342

 
328

Cash, cash equivalents and restricted cash
$
114,528

 
$
116,252


See Notes to Unaudited Condensed Consolidated Financial Statements

13

Table of Contents

RAMBUS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.
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 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 consolidated financial statements and notes thereto in Form 10-K for the year ended December 31, 2018.
Operating Segment Definitions
Operating segments are based upon Rambus' 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 determined its CODM to be the Chief Executive Officer and determined its operating segments to be: (1) Memory and Interfaces Division ("MID"), which focuses on the design, development, manufacturing through partnerships and licensing of technology and solutions that is related to memory and interfaces; (2) Rambus Security Division ("RSD"), which focuses on the design, development, deployment and licensing of technologies for chip, system and in-field application security, anti-counterfeiting, smart ticketing and mobile payments; and (3) Emerging Solutions Division ("ESD"), which includes the Rambus Labs team and the development efforts in the area of emerging technologies.
For the three and six months ended June 30, 2019, only MID and RSD were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining operating segment were shown under “Other.”
Comparability
Effective January 1, 2019, Rambus adopted the new lease accounting standards. Prior periods were not retrospectively recast, so the consolidated balance sheet as of December 31, 2018 and the results of operations for the three and six months ended June 30, 2018 were prepared using accounting standards that were different than those in effect as of and for the three and six months ended June 30, 2019. Therefore, the consolidated balance sheets as of June 30, 2019 and December 31, 2018 are not directly comparable, nor are the results of operations for the three and six months ended June 30, 2019 and 2018.
Reclassifications
Certain prior periods' amounts were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported net income for any of the periods presented.
2. Recent Accounting Pronouncements
Recent Accounting Pronouncements Adopted
In February 2016, the FASB issued ASU No. 2016-02, "Leases." This ASU requires lessees to recognize right-of-use assets and liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. In addition, it requires lessees to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases," and ASU No. 2018-11, "Leases (Topic 842)," which allow the application of the new guidance at the beginning of the year of adoption, recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, in addition to the method of applying the new guidance retrospectively to each prior reporting period presented. The

14

Table of Contents

amendments in ASU No. 2018-10 and ASU No. 2018-11 have the same effective and transition requirements as ASU 2016-02 (collectively referred to as the "New Leasing Standard").
The Company adopted the New Leasing Standard as of January 1, 2019 using the alternative transition method provided by ASU No. 2018-11 and did not recast comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. Additionally, the Company elected the practical expedient related to non-lease components in which the Company will not separate non-lease components from lease components. Finally, the Company made the policy election for the short-term leases exemptions, which allows the Company to not recognize lease assets and liabilities for leases having a term of 12 months or less. Upon adoption, the Company recognized $21.4 million and $23.9 million of lease assets and liabilities, respectively, on its unaudited condensed consolidated balance sheet. The difference between the lease assets and lease liabilities, net of the deferred tax impact which was not material, was recorded as an adjustment to the opening accumulated deficit. Additionally, in accordance with the New Leasing Standard, the Company was required to derecognize the Sunnyvale and Ohio facilities as imputed facility obligations (as accounted for under the previous leasing guidance) and recognize these facilities as operating leases on the unaudited condensed consolidated balance sheet. This change resulted in no longer recognizing interest expense associated with these imputed facility lease obligations, but instead, recognizing operating lease costs which will be included in operating costs and expenses on the unaudited condensed consolidated statement of operations. Furthermore, the Company derecognized $37.6 million of imputed financing obligation related to these facilities and $32.0 million of capitalized building property upon adoption of the New Leasing Standard. The adoption of the New Leasing Standard impacted the Company's opening accumulated deficit by $4.5 million.
Recent Accounting Pronouncements Not Yet Adopted
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU remove certain disclosures, modify certain disclosures and add additional disclosures. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis. The Company is currently evaluating the impact that this guidance will have on its condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13. The purpose of this ASU is to require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (ASU 2019-04)," which provided certain improvements to various ASUs, including ASU 2016-13. In May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments-Credit Losses (Topic 326)," which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. These ASUs and the related amendments are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact that this guidance will have on its financial condition and results of operations.
3. Revenue Recognition
The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services. Unless indicated otherwise below, all of the goods and services are distinct and are accounted for as separate performance obligations.
Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price basis. The Company has established standalone selling prices for all of its offerings - specifically, the same pricing methodology is consistently applied to all licensing arrangements; all services offerings are priced within tightly controlled bands and all contracts that include support and maintenance state a renewal rate or price that is systematically enforced.
Rambus’ revenue consists of royalty, product and contract and other revenue. Royalty revenue consists of patent and technology license royalties. Products consist of memory buffer chipsets sold directly and indirectly to module manufacturers and OEMs worldwide through multiple channels, including our direct sales force and distributors. Contract and other revenue consists of software license fees, engineering fees associated with integration of Rambus’ technology solutions into its customers’ products and support and maintenance fees.
1.Royalty Revenue
Rambus’ patent and technology licensing arrangements generally range between 1 year and 7 years in duration and generally grant the licensee the right to use the Company's entire IP portfolio as it evolves over time. These arrangements do not typically grant the licensee the right to terminate for convenience and where such rights exist, termination is prospective,

15

Table of Contents

with no refund of fees already paid by the licensee. There is no interdependency or interrelation between the IP included in the portfolio licensed upon contract inception and any IP subsequently made available to the licensee, and the Company would be able to fulfill its promises by transferring the portfolio and the additional IP use rights independently. However, the numbers of additions to, and removals from the portfolio (for example when a patent expires and renewal is not granted to the Company) in any given period have historically been relatively consistent; as such, the Company does not allocate the transaction price between the rights granted at contract inception and those subsequently granted over time as a function of these additions.
Patent and technology licensing arrangements result in fixed payments received over time, with guaranteed minimum payments on occasion, variable payments calculated based on the licensee’s sale or use of the IP, or a mix of fixed and variable payments.
For fixed-fee arrangements (including arrangements that include minimum guaranteed amounts), variable royalty arrangements that the Company has concluded are fixed in substance and the fixed portion of hybrid fixed/variable arrangements, the Company recognizes revenue upon control over the underlying IP use right transferring to the licensee, net of the effect of significant financing components calculated using customer-specific, risk-adjusted lending rates ranging between 3% and 6%, with the related interest income being recognized over time on an effective rate basis. Where a licensee has the contractual right to terminate a fixed-fee arrangement for convenience without any substantive penalty payable upon such termination, the Company applies the guidance in ASU No. 2014-09, Revenue from Contracts with Customers in Accounting Standards Codification (ASC) Topic 606 ("ASC 606" or "the New Revenue Standard") to the duration of the contract in which the parties have present enforceable rights and obligations and only recognizes revenue for amounts that are due and payable.
 
For variable arrangements, the Company recognizes revenue based on an estimate of the licensee’s sale or usage of the IP during the period of reference, typically quarterly, with a true-up being recorded when the Company receives the actual royalty report from the licensee.

2.Product Revenue
Product revenue is recognized upon shipment of product to customers, net of accruals for estimated sales returns and allowances, and to distributors, net of accruals for price protection and rights of return on products unsold by the distributors. To date, none of these accruals have been significant. The Company transacts with direct customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date.
3.Contract and Other Revenue
Contract and other revenue consists of software license fees and engineering fees associated with integration of Rambus’ technology solutions into its customers’ related support and maintenance.
An initial software arrangement generally consists of a term-based or perpetual license, significant software customization services and support and maintenance services that include post-implementation customer support and the right to unspecified software updates and enhancements on a when and if available basis. The Company recognizes the license and customization services revenue based on man-days incurred during the reporting period as compared to the estimated total man-days necessary for each contract, and the support and maintenance revenue ratably over term. The Company recognizes license renewal revenue at the beginning of the renewal period. The Company recognizes revenue from professional services purchased in addition to an initial software arrangement on a cumulative catch-up basis if these services are not distinct from the services provided as part of the initial software arrangement, or as a separate contract if these services are distinct.
During the first quarter of 2016, the Company acquired Smart Card Software Ltd., which included Bell Identification Ltd. (Payment Product Group) and Ecebs Ltd. (Ticketing Products Group), which transact mostly in software and Software-as-a-Service arrangements, respectively.
The Company's Payment Product Group derives a significant portion of its revenue from heavily customized software in the mobile market, whereby the Payment Product Group’s software solution interacts with third-party solutions and other payment platforms to provide the functionality the customer requires. Historically, these third-party solutions have evolved at a rapid pace, with the Payment Product Group being required to deliver as part of its support and maintenance services the patches and updates needed to maintain the functionality of its own software offering. As the utility of the solution to the end customer erodes very quickly without these updates, these are viewed as critical and the customized software solution and updates are not separately identifiable. As such, these arrangements are treated as a single performance obligation; revenue is deferred until completion of the customization services, and recognized ratably over the committed support and maintenance term, typically ranging from 1 year to 3 years.

16

Table of Contents

The Company's Ticketing Products Group primarily derives revenue from ticketing services arrangements that systematically consist of a software component, support and maintenance, managed services and hosting services. The software could be hosted by third-party hosting service providers or the Company. All arrangements entered into subsequent to the acquisition preclude customers from taking possession of the software at any time during the hosting term and the Company has concluded that should a customer that was under contract as of the acquisition date ever request possession of the software, the Ticketing Products Group would have the ability to charge the customer, and enforce a claim to payment of a substantive fee in exchange for such right, and that the costs of setting up the environment needed to run the software would act as a significant disincentive to the customer taking possession of the software. Based on the above, the Company concluded that these services are a single performance obligation, with customers simultaneously receiving and consuming the benefits provided by the Ticketing Products Group’s performance, and recognize ticketing services revenue ratably over the term, commencing upon completion of setup activities. The Company recognizes setup fees upon completion. While these activities do not transfer a service to the customer, the Company elected not to defer and amortize these fees over the expected duration of the customer relationship due to the immateriality of the amounts charged.
Significant Judgments
Historically and with the exception noted below, no significant judgment has generally been required in determining the amount and timing of revenue from the Company's contracts with customers.
The Company has adequate tools and controls in place, and substantial experience and expertise in timely and accurately tracking man-days incurred in completing customization and other professional services, and quantifying changes in estimates.

Key estimates used in recognizing revenue predominantly consist of the following:
All fixed-fee arrangements result in cash being received after control over the underlying IP use right has transferred to the licensee, and over a period exceeding a year. As such, all these arrangements include a significant financing component. The Company calculates a customer-specific lending rate using a Daily Treasury Yield Curve Rate that changes depending on the date on which the licensing arrangement was entered into and the term (in years) of the arrangement, and takes into consideration a licensee-specific risk profile determined based on a review of the licensee’s “Full Company View” Dun & Bradstreet report obtained on the date the licensing arrangement was signed by the parties, with a risk premium being added to the Daily Treasury Yield Curve Rate considering the overall business risk, financing strength and risk indicators, as listed.

The Company recognizes revenue on variable fee licensing arrangements on the basis of estimates. In connection with the adoption of the New Revenue Standard, the Company has set up specific procedures and controls to ensure timely and accurate quantification of variable royalties, and implemented new systems to enable the preparation of the estimates and reporting of the financial information required by the New Revenue Standard.

Contract Balances
Timing of revenue recognition may differ from the timing of invoicing to the Company's customers. The Company records contract assets when revenue is recognized prior to invoicing, and a contract liability when revenue is recognized subsequent to invoicing.
The contract assets are primarily related to the Company’s fixed fee IP licensing arrangements and rights to consideration for performance obligations delivered but not billed as of June 30, 2019. The contract assets are transferred to receivables when the billing occurs.
The Company’s contract balances were as follows:
 
As of
(In thousands)
June 30, 2019
 
December 31, 2018
Unbilled receivables
$
597,429

 
$
673,616

Deferred revenue
6,448

 
19,566


During the three and six months ended June 30, 2019, the Company recognized $8.1 million and $16.1 million, respectively, of revenue that was included in the contract balances as of December 31, 2018.

17

Table of Contents

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 $19.6 million as of June 30, 2019, which the Company primarily expects to recognize over the next 2 years.

4. Earnings (Loss) Per Share
Basic earnings (loss) per share is calculated by dividing the net income (loss) 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 incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees 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 (loss) per share:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net loss per share:
(In thousands, except per share amounts)
Numerator:
 

 
 

 
 
 
 
Net loss
$
(36,980
)
 
$
(15,357
)
 
$
(63,556
)
 
$
(51,046
)
Denominator:
 
 
 
 
 
 
 
Weighted-average shares outstanding - basic
110,875

 
107,737

 
110,287

 
108,542

Effect of potential dilutive common shares

 

 

 

Weighted-average shares outstanding - diluted
110,875

 
107,737

 
110,287

 
108,542

Basic net loss per share
$
(0.33
)
 
$
(0.14
)
 
$
(0.58
)
 
$
(0.47
)
Diluted net loss per share
$
(0.33
)
 
$
(0.14
)
 
$
(0.58
)
 
$
(0.47
)
For the three months ended June 30, 2019 and 2018, options to purchase approximately 1.1 million and 1.3 million shares, respectively, and for the six months ended June 30, 2019 and 2018, options to purchase approximately 1.2 million and 1.4 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise and related unrecognized stock-based compensation expense. For the three and six months ended June 30, 2019, an additional 1.6 million and 1.5 million shares, respectively, and for the three and six months ended June 30, 2018, an additional 3.4 million and 3.7 million shares, respectively, were excluded from the weighted average dilutive shares because there was a net loss position for the periods.
5. Intangible Assets and Goodwill
Goodwill
The following tables present goodwill information for each of the reportable segments for the six months ended June 30, 2019:
Reportable Segment:
As of December 31, 2018
 
Reclassifications to
Assets Held for Sale
 (1)
 
Effect of
Exchange Rates
 (2)
 
As of June 30, 2019
 
 
MID
$
66,643

 
$

 
$

 
$
66,643

RSD
140,535

 
(53,882
)
 
(152
)
 
86,501

Total
$
207,178

 
$
(53,882
)
 
$
(152
)
 
$
153,144

______________________________________
(1)
Refer to Note 16, "Assets and Liabilities Held for Sale," for additional information.
(2)
Effect of exchange rates relates to foreign currency translation adjustments for the period.


18

Table of Contents

 
As of
 
June 30, 2019
Reportable Segment:
Gross Carrying Amount
 
Accumulated Impairment Losses
 
Reclassifications to
Assets Held for Sale
(1)
 
Net Carrying Amount
 
(In thousands)
MID
$
66,643

 
$

 
$

 
$
66,643

RSD
140,383

 

 
(53,882
)
 
86,501

Other
21,770

 
(21,770
)
 

 

Total
$
228,796

 
$
(21,770
)
 
$
(53,882
)
 
$
153,144


______________________________________
(1)
Refer to Note 16, "Assets and Liabilities Held for Sale," for additional information.

Intangible Assets, Net
The components of the Company’s intangible assets as of June 30, 2019 and December 31, 2018 were as follows:
 
 
 
As of June 30, 2019
 
Useful Life
 
Gross Carrying
 Amount (1)
 
Accumulated
 Amortization (1)
 
Net Carrying
 Amount
 
 
 
(In thousands)
Existing technology
3 to 10 years
 
$
234,620

 
$
(208,188
)
 
$
26,432

Customer contracts and contractual relationships
1 to 10 years
 
34,693

 
(32,977
)
 
1,716

Non-compete agreements and trademarks
3 years
 
300

 
(300
)
 

In-process research and development
Not applicable
 
1,600

 

 
1,600

Total intangible assets
 
 
$
271,213


$
(241,465
)
 
$
29,748

_________________________________________
(1)
As of June 30, 2019, the Company had reclassified approximately $19.8 million of net intangible assets related to the RSD segment to assets held for sale. Refer to Note 16, "Assets and Liabilities Held for Sale," for additional information.

 
 
 
As of December 31, 2018
 
Useful Life
 
Gross Carrying
 Amount (1)
 
Accumulated
 Amortization (1)
 
Net Carrying
 Amount
 
 
 
(In thousands)
Existing technology
3 to 10 years
 
$
258,903

 
$
(213,824
)
 
$
45,079

Customer contracts and contractual relationships
1 to 10 years
 
67,667

 
(54,410
)
 
13,257

Non-compete agreements and trademarks
3 years
 
300

 
(300
)
 

In-process research and development
Not applicable
 
1,600

 

 
1,600

Total intangible assets
 
 
$
328,470

 
$
(268,534
)
 
$
59,936


_________________________________________
(1)
The changes in gross carrying amount and accumulated amortization reflect the effects of exchange rates during the period.

During the three and six months ended June 30, 2019 and 2018, the Company did not purchase or sell any intangible assets.

Included in customer contracts and contractual relationships are favorable contracts which are acquired software and service agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces the favorable contract intangible asset. For the three months ended June 30, 2019 and 2018, the Company received $0.2 million and $0.3 million, respectively, related to the favorable contracts. For the six months ended June 30, 2019 and 2018, the Company received $0.7 million and $1.0 million, respectively, related to the favorable contracts. As of June 30, 2019, the net balance of the favorable contract intangible assets was classified as an asset held for sale. Refer to Note 16, "Assets and Liabilities Held for Sale," for additional information. As of December 31, 2018, the net balance of the favorable contract intangible assets was $0.9 million.

19

Table of Contents

Amortization expense for intangible assets for the three and six months ended June 30, 2019 was $4.9 million and $9.9 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2018 was $8.7 million and $19.3 million, respectively. The estimated future amortization of intangible assets as of June 30, 2019 was as follows (amounts in thousands):
Years Ending December 31:
Amount
2019 (remaining 6 months)
$
5,968

2020
11,905

2021
8,078

2022
1,261

2023
740

Thereafter