SAN JOSE, Calif. - Rambus Inc . (NASDAQ:RMBS), a prominent provider of chips and IP for making data faster and safer, disclosed its financial outcomes for the first quarter ended March 31, 2024, with figures falling short of Wall Street expectations.
The company reported an adjusted EPS of $0.30, which was below the analyst consensus of $0.44. Revenue was reported at $117.9 million, also missing the consensus estimate of $132 million.
The first quarter results represent a significant divergence from analyst expectations, with the stock price responding negatively, dropping 2.4% following the earnings release.
Comparing year-over-year (YoY) performance, Rambus saw a decrease in product revenue from $63.8 million in the first quarter of 2023 to $50.4 million in the same quarter of 2024. However, total revenue saw a slight increase from $113.8 million to $117.9 million YoY, largely due to a rise in royalties from $28.2 million to $47.5 million.
Luc Seraphin, CEO of Rambus, commented on the quarter's performance, stating, "Through strong execution and strategic focus on data center and AI, we delivered solid first quarter results." He highlighted the company's expansion in market opportunities with the launch of new products and its commitment to driving long-term profitable growth while returning value to shareholders.
Looking ahead, Rambus provided its outlook for the second quarter of 2024, with licensing billings expected to range from $61 million to $67 million, and product revenue anticipated to be between $52 million and $58 million. The company also forecasts contract and other revenue to be in the range of $17 million to $23 million. Operating costs and expenses are projected to be between $95 million and $91 million, with non-GAAP operating costs and expenses estimated to be between $80 million and $76 million.
The midpoint of the guidance for licensing billings and product revenue suggests a steady outlook, aligning closely with prior performance. However, specific revenue guidance will be discussed in the company's upcoming conference call.
Rambus remains focused on its strategic initiatives, having completed a $50.0 million accelerated share repurchase program and introduced a new family of DDR5 PMICs for AI and traditional servers, reinforcing its position in the data center market.
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