RAMBUS INC [RMBS] Filings

10-Q 1 rmbs-20220331.htm 10-Q rmbs-20220331

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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 March 31, 2022

☐ 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.)

4453 North First Street

Suite 100

San Jose

California

95134

(Address of principal executive offices)

(ZIP Code)

Registrant’s telephone number, including area code:

(408) 462-8000

________________________________________

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.

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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 110,235,608 as of March 31, 2022.

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RAMBUS INC.

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			PAGE
Note Regarding Forward-Looking Statements			4
PART I. FINANCIAL INFORMATION			6
Item 1. Financial Statements (Unaudited):			6
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021			6
Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021			7
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021			8
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021			9
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021			10
Notes to Unaudited Condensed Consolidated Financial Statements			11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
PART II. OTHER INFORMATION			36
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			55
Item 3. Defaults Upon Senior Securities			55
Item 4. Mine Safety Disclosures			55
Item 5. Other Information			55
Item 6. Exhibits			56
Signature			57

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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 Exchange 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 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;

•Continued product revenue growth;

•International licenses, operations and expansion;

•Effects of changes in the economy and credit market on our industry and business;

•Impact of the ongoing COVID-19 pandemic, including its most recent variants, on our business operations and financial results;

•Ability to identify, attract, motivate and retain qualified personnel, especially in light of a hyper-competitive compensation environment;

•Effects of government regulations on our industry and business;

•Manufacturing, shipping and supply partners, supply chain availability and/or sale and distribution channels;

•Growth in our business;

•Methods, estimates and judgments in accounting policies;

•Adoption of new accounting pronouncements;

•Effective tax rates, including as a result of recent 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 (“IP”);

•Any changes in laws, agency actions and judicial rulings that may impact the ability to enforce our IP rights;

•Indemnification and technical support obligations;

•Equity repurchase programs;

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•Issuances of debt or equity securities, which could involve restrictive covenants or be dilutive to our existing stockholders;

•Effects of fluctuations in interest rates and currency exchange rates;

•Effects of a rising rate of inflation;

•Management of supply chain risks; and

•Outcome and effect of potential future IP litigation and other significant litigation.

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.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

RAMBUS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In thousands, except shares and par value)	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	179,129	$	107,891
Marketable securities	164,562		377,718
Accounts receivable	51,232		44,065
Unbilled receivables	131,748		135,608
Inventories	6,164		8,482

Prepaids and other current assets	12,277		10,600

Total current assets	545,112		684,364
Intangible assets, net	57,634		58,420
Goodwill	279,793		278,810
Property, plant and equipment, net	54,965		56,035
Operating lease right-of-use assets	22,714		23,712
Deferred tax assets	3,986		4,047
Unbilled receivables	93,367		123,018
Other assets	3,304		4,240
Total assets	$	1,060,875	$	1,232,646
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,540	$	11,279
Accrued salaries and benefits	17,402		20,945

Convertible notes	73,860		163,687
Deferred revenue	20,624		24,755

Income taxes payable	21,015		20,607
Operating lease liabilities	5,854		5,992

Other current liabilities	14,107		20,002
Total current liabilities	168,402		267,267


Long-term operating lease liabilities	27,939		29,099
Long-term income taxes payable	16,681		21,424
Deferred tax liabilities	24,572		23,985
Other long-term liabilities	30,155		28,475
Total liabilities	267,749		370,250
Commitments and contingencies (Notes 9, 11 and 15)
Stockholders’ equity:
Convertible preferred stock, $.001 par value:
Authorized: 5,000,000 shares; Issued and outstanding: no shares at March 31, 2022 and December 31, 2021	—		—
Common stock, $.001 par value:
Authorized: 500,000,000 shares; Issued and outstanding: 110,235,608 shares at March 31, 2022 and 109,292,235 shares at December 31, 2021	110		109
Additional paid-in capital	1,272,353		1,298,966
Accumulated deficit	(475,024)		(435,227)
Accumulated other comprehensive loss	(4,313)		(1,452)
Total stockholders’ equity	793,126		862,396
Total liabilities and stockholders’ equity	$	1,060,875	$	1,232,646

Refer to Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	March 31,
(In thousands, except per share amounts)	2022		2021
Revenue:
Product revenue	$	47,969	$	30,781
Royalties	30,464		28,859
Contract and other revenue	20,617		10,742
Total revenue	99,050		70,382
Cost of revenue:
Cost of product revenue	18,397		11,410
Cost of contract and other revenue	624		1,556
Amortization of acquired intangible assets	3,378		4,386
Total cost of revenue	22,399		17,352
Gross profit	76,651		53,030
Operating expenses:
Research and development	39,815		32,354
Sales, general and administrative	26,906		23,562

Amortization of acquired intangible assets	409		229
Restructuring charges	—		368
Change in fair value of earn-out liability	1,200		—



Total operating expenses	68,330		56,513
Operating income (loss)	8,321		(3,483)
Interest income and other income (expense), net	1,360		2,981
Loss on extinguishment of debt	(66,497)		—
Loss on fair value adjustment of derivatives, net	(8,283)		—
Interest expense	(605)		(2,614)
Interest and other income (expense), net	(74,025)		367
Loss before income taxes	(65,704)		(3,116)
Provision for (benefit from) income taxes	514		(503)
Net loss	$	(66,218)	$	(2,613)
Net loss per share:
Basic	$	(0.60)	$	(0.02)
Diluted	$	(0.60)	$	(0.02)
Weighted-average shares used in per share calculation:
Basic	109,889		112,211
Diluted	109,889		112,211

Refer to Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended
	March 31,
(In thousands)	2022		2021
Net loss	$	(66,218)	$	(2,613)
Other comprehensive loss:
Foreign currency translation adjustment	(293)		(21)
Unrealized loss on marketable securities, net of tax	(2,568)		(31)
Total comprehensive loss	$	(69,079)	$	(2,665)

Refer to Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	For the Three Months Ended March 31, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
(In thousands)	Shares	Amount								Total
Balances at December 31, 2021	109,292	$	109	$	1,298,966	$	(435,227)	$	(1,452)	$	862,396
Net loss	—	—		—		(66,218)		—		(66,218)
Foreign currency translation adjustment	—	—		—		—		(293)		(293)
Unrealized loss on marketable securities, net of tax	—	—		—		—		(2,568)		(2,568)
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan	943	1		(15,501)		—		—		(15,500)


Stock-based compensation	—	—		7,778		—		—		7,778
Retirement of convertible senior note hedges	—	—		62,011		—		—		62,011
Retirement of warrants	—	—		(46,356)		—		—		(46,356)
Cumulative effect adjustment from adoption of ASU 2020-06	—	—		(34,545)		26,421		—		(8,124)
Balances at March 31, 2022	110,235	$	110	$	1,272,353	$	(475,024)	$	(4,313)	$	793,126

	For the Three Months Ended March 31, 2021
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
(In thousands)	Shares	Amount								Total
Balances at December 31, 2020	111,698	$	112	$	1,270,426	$	(357,751)	$	(81)	$	912,706
Net loss	—	—		—		(2,613)		—		(2,613)
Foreign currency translation adjustment	—	—		—		—		(21)		(21)
Unrealized loss on marketable securities, net of tax	—	—		—		—		(31)		(31)
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan	807	1		(7,137)		—		—		(7,136)

Stock-based compensation	—	—		6,501		—		—		6,501


Balances at March 31, 2021	112,505	$	113	$	1,269,790	$	(360,364)	$	(133)	$	909,406

Refer to Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
	March 31,
(In thousands)	2022		2021
Cash flows from operating activities:
Net loss	$	(66,218)	$	(2,613)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	7,778		6,501
Depreciation	7,040		6,198
Amortization of intangible assets	3,786		4,615
Non-cash interest expense and amortization of convertible debt issuance costs	105		1,874
Loss on extinguishment of debt	66,497		—
Loss on fair value adjustment of derivatives, net	8,283		—


Deferred income taxes	648		416

Loss on equity investment	324		200
Realized loss from sale of marketable securities	688		—

Gain on disposal of property, plant and equipment	(6)		—

Change in fair value of earn-out liability	1,200		—
Change in operating assets and liabilities:
Accounts receivable	(7,167)		(8,034)
Unbilled receivables	33,511		30,767
Prepaids and other current assets	(663)		3,589
Inventories	2,318		4,540
Accounts payable	1,104		297
Accrued salaries and benefits and other liabilities	(6,853)		(7,861)
Income taxes payable	(4,311)		(4,786)
Deferred revenue	(4,152)		3,223
Operating lease liabilities	(1,298)		532
Net cash provided by operating activities	42,614		39,458
Cash flows from investing activities:
Purchases of property, plant, and equipment	(1,683)		(3,517)
Acquisition of intangible assets	(3,000)		—
Purchases of marketable securities	(39,433)		(159,755)
Maturities of marketable securities	44,781		106,475

Proceeds from sales of marketable securities	204,091		8,332





Net cash provided by (used in) investing activities	204,756		(48,465)
Cash flows from financing activities:
Proceeds received from issuance of common stock under employee stock plans	321		920
Payments of taxes on restricted stock units	(15,821)		(8,057)
Payments under installment payment arrangements	(3,220)		(3,119)
Repurchase of convertible senior notes	(174,454)		—
Proceeds from retirement of convertible senior note hedges	72,415		—
Payments for retirement of warrants	(55,148)		—





Net cash used in financing activities	(175,907)		(10,256)
Effect of exchange rate changes on cash and cash equivalents	(224)		(144)
Net increase (decrease) in cash, cash equivalents and restricted cash	71,239		(19,407)
Cash, cash equivalents and restricted cash at beginning of period	108,264		129,324
Cash, cash equivalents and restricted cash at end of period	$	179,503	$	109,917

Non-cash investing and financing activities:
Property, plant and equipment received and accrued in accounts payable and other liabilities	$	14,238	$	15,210


Reconciliation of the cash, cash equivalents and restricted cash balances as of March 31, 2022 and December 31, 2021:
	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	179,129	$	107,891
Restricted cash	374		373
Cash, cash equivalents and restricted cash	$	179,503	$	108,264

Refer to Notes to Unaudited Condensed Consolidated Financial Statements

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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, 2021.

2. Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) (“ASU 2020-06”).” The amendments in this ASU simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, the guidance removes the liability and equity separation models for convertible instruments. Instead, entities will account for convertible debt instruments wholly as debt unless convertible instruments contain features that require bifurcation as a derivative or that result in substantial premiums accounted for as paid-in capital. The guidance also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. Upon adoption, the Company reversed approximately $35.2 million of debt discount related to the Company’s 1.375% Convertible Senior Notes due 2023 (the “2023 Notes”) from additional paid-in capital, reversed approximately $8.3 million representing the unamortized debt discount from liabilities, and recorded the net impact of $26.9 million to accumulated deficit. The Company also removed approximately $0.7 million of debt issuance costs related to the 2023 Notes from additional paid-in capital and recorded approximately $0.5 million to accumulated deficit related to the amortization of debt issuance costs that were historically allocated to equity. The Company expects reported interest expense for its convertible notes to decrease in the future.

Recent Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this ASU improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistencies related to recognition of an acquired contract liability, and to payment terms and their effect on subsequent revenue recognized by the acquirer. Among other changes, this ASU requires that an acquirer account for acquired revenue contracts in accordance with Topic 606 as if it had originated the contracts. If the acquirer is unable to assess or rely on how the acquiree applied Topic 606, the acquirer should consider the terms of the acquired contracts as of the contract inception or contract modification date in applying Topic 606 to determine what should be recorded at the acquisition date. The amendments also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

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3. Revenue Recognition

Contract Balances

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 March 31, 2022.

The Company’s contract balances were as follows:


	As of
(In thousands)	March 31, 2022		December 31, 2021
Unbilled receivables	$	225,115	$	258,626
Deferred revenue	22,045		26,198

During the three months ended March 31, 2022, the Company recognized $11.7 million of revenue that was included in the contract balances as of December 31, 2021. During the three months ended March 31, 2021, the Company recognized $4.6 million of revenue that was included in the contract balances as of December 31, 2020.

Remaining Performance Obligations

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 $27.0 million as of March 31, 2022, 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 loss per share:


	Three Months Ended
	March 31,
(In thousands, except per share amounts)	2022		2021
Net loss per share:
Numerator:
Net loss	$	(66,218)	$	(2,613)
Denominator:
Weighted-average shares outstanding - basic	109,889		112,211
Effect of potential dilutive common shares	—		—
Weighted-average shares outstanding - diluted	109,889		112,211
Basic net loss per share	$	(0.60)	$	(0.02)
Diluted net loss per share	$	(0.60)	$	(0.02)

For both the three months ended March 31, 2022 and 2021, an additional 3.4 million, respectively, were excluded from the weighted-average dilutive shares because there was a net loss position for the periods. During the three months ended March 31, 2022, the Company’s stock price exceeded the 2023 Notes' conversion price of $18.93 per share, therefore approximately 0.8 million shares for the three months ended March 31, 2022, respectively, were included in the weighted-average dilutive shares.

As a result of the Company’s adoption of ASU No. 2020-06 on January 1, 2022, the dilutive impact of the 2023 Notes on the calculation of diluted net income (loss) per share is considered using the if-converted method. Furthermore, because the

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principal amount of the 2023 Notes must be settled in cash, the dilutive impact of applying the if-converted method is limited to the in-the-money portion, if any, of the 2023 Notes. For periods prior to the Company’s January 1, 2022 adoption of ASU No. 2020-06, the Company applied the treasury stock method to account for the dilutive impact of the 2023 Notes for diluted net income (loss) per share purposes. Under the if-converted method, the cumulative dilutive effect of the 2023 Notes would be approximately 2.6 million shares. Refer to Note 10, “Convertible Notes,” for additional information.

5. Intangible Assets and Goodwill

Goodwill

The following tables present goodwill information for the three months ended March 31, 2022:


(In thousands)	As of December 31, 2021		Adjustment to Goodwill (1)		As of March 31, 2022
Total goodwill	$	278,810	$	983	$	279,793

_________________________________________

(1) During the three months ended March 31, 2022, the Company corrected an immaterial error related to an understatement in other current liabilities that originated from the acquisition of AnalogX in 2021.


	As of March 31, 2022
(In thousands)	Gross Carrying Amount		Accumulated Impairment Losses		Net Carrying Amount
Total goodwill	$	301,563	$	(21,770)	$	279,793

Intangible Assets, Net

The components of the Company’s intangible assets as of March 31, 2022 and December 31, 2021 were as follows:


		As of March 31, 2022
(In thousands)	Useful Life	Gross Carrying Amount (1)		Accumulated Amortization (1)		Net Carrying Amount
Existing technology	3 to 10 years	$	295,058	$	(250,892)	$	44,166
Customer contracts and contractual relationships	0.5 to 10 years	37,793		(35,525)		2,268
Non-compete agreements and trademarks	3 years	300		(300)		—
In-process research and development	Not applicable	11,200		—		11,200
Total intangible assets		$	344,351	$	(286,717)	$	57,634

_________________________________________

(1) During the three months ended March 31, 2022, the Company acquired certain intangible assets for $3.0 million in cash. The assets were classified as existing technology and are being amortized over their expected useful life of five years. During the three months ended March 31, 2022, the amortization for the acquired assets was not material.


		As of December 31, 2021
(In thousands)	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Existing technology	3 to 10 years	$	292,058	$	(247,422)	$	44,636
Customer contracts and contractual relationships	0.5 to 10 years	37,793		(35,209)		2,584
Non-compete agreements and trademarks	3 years	300		(300)		—
In-process research and development (“IPR&D”)	Not applicable	11,200		—		11,200
Total intangible assets		$	341,351	$	(282,931)	$	58,420

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Amortization expense for intangible assets for the three months ended March 31, 2022 and 2021 was $3.8 million and $4.6 million, respectively.

The estimated future amortization of intangible assets as of March 31, 2022 was as follows (in thousands):


Years Ending December 31:	Amount
2022 (remaining nine months)	$	11,221
2023	14,091
2024	11,780
2025	5,780
2026	3,462
Thereafter	100
Total amortizable purchased intangible assets	46,434
IPR&D	11,200
Total intangible assets	$	57,634

6. Segments and Major Customers

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 has determined its CODM to be the Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating decisions and assessing financial performance. On this basis, the Company is organized and operates as a single segment within the semiconductor space. As of March 31, 2022, the Company has a single operating and reportable segment.

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable at March 31, 2022 and December 31, 2021, respectively, was as follows:


	As of
Customer	March 31, 2022		December 31, 2021
Customer 1	18	%	*
Customer 2	17	%	17	%
Customer 3	14	%	19	%

_________________________________________

* Customer accounted for less than 10% of total accounts receivable in the period.

Revenue from the Company’s major customers representing 10% or more of total revenue for the three months ended March 31, 2022 and 2021, respectively, was as follows:


	Three Months Ended
	March 31,
Customer	2022		2021
Customer A	25	%	23	%
Customer B	14	%	*
Customer C	*		14	%

_________________________________________

* Customer accounted for less than 10% of total revenue in the period.

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Revenue from customers in the geographic regions based on the location of contracting parties was as follows:


	Three Months Ended
	March 31,
(In thousands)	2022		2021
USA	$	55,684	$	46,151
Asia-Other	17,792		3,574
Singapore	14,045		6,338
Taiwan	4,960		8,843
Japan	3,535		4,588
Europe	1,564		446
South Korea	1,465		388
Canada	5		54
Total	$	99,050	$	70,382

7. Marketable Securities

Rambus invests its excess cash and cash equivalents primarily in U.S. government-sponsored obligations, commercial paper, corporate notes and bonds, money market funds and municipal notes and bonds that mature within three years.

All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows:


	As of March 31, 2022
(In thousands, except percentages)	Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Weighted Rate of Return
Money market funds	$	6,058	$	6,058	$	—	$	—	0.21	%
U.S. Government bonds and notes	63,023		64,547		—		(1,524)		0.37	%
Corporate notes, bonds and commercial paper	111,314		113,421		—		(2,107)		0.33	%
Total cash equivalents and marketable securities	180,395		184,026		—		(3,631)
Cash	163,296		163,296		—		—
Total cash, cash equivalents and marketable securities	$	343,691	$	347,322	$	—	$	(3,631)


	As of December 31, 2021
(In thousands, except percentages)	Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Weighted Rate of Return
Money market funds	$	7,402	$	7,402	$	—	$	—	0.02	%
U.S. Government bonds and notes	102,812		103,113		—		(301)		0.29	%
Corporate notes, bonds and commercial paper	287,905		288,667		8		(770)		0.22	%
Total cash equivalents and marketable securities	398,119		399,182		8		(1,071)
Cash	87,490		87,490		—		—
Total cash, cash equivalents and marketable securities	$	485,609	$	486,672	$	8	$	(1,071)

Available-for-sale securities are reported at fair value on the balance sheets and classified along with cash as follows:


	As of
(In thousands)	March 31, 2022		December 31, 2021
Cash equivalents	$	15,833	$	20,401
Short-term marketable securities	164,562		377,718
Total cash equivalents and marketable securities	180,395		398,119
Cash	163,296		87,490
Total cash, cash equivalents and marketable securities	$	343,691	$	485,609

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The Company continues to invest in highly rated and highly liquid debt securities. The Company holds all of its marketable securities as available-for-sale, marks them to market, and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation, and unrealized losses that may be other than temporary.

The estimated fair value and gross unrealized losses of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position at March 31, 2022 and December 31, 2021 are as follows:


	Fair Value				Gross Unrealized Losses
(In thousands)	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Less than 12 months
U.S. Government bonds and notes	$	63,023	$	82,822	$	(1,524)	$	(301)
Corporate notes, bonds and commercial paper	104,432		255,783		(2,068)		(770)
Total cash equivalents and marketable securities in a continuous unrealized loss position for less than 12 months	167,455		338,605		(3,592)		(1,071)
12 months or greater

Corporate notes, bonds and commercial paper	1,878		—		(39)		—
Total cash equivalents and marketable securities in a continuous unrealized loss position for 12 months or greater	1,878		—		(39)		—
Total cash equivalents and marketable securities in a continuous unrealized loss position	$	169,333	$	338,605	$	(3,631)	$	(1,071)

The gross unrealized losses at March 31, 2022 and December 31, 2021 were not material in relation to the Company’s total available-for-sale portfolio. The gross unrealized losses can be primarily attributed to a combination of market conditions as well as the demand for and duration of the U.S. government-sponsored obligations and corporate notes and bonds. The Company reasonably believes that there is no need to sell these investments and that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. Therefore, these unrealized losses were recorded in other comprehensive income (loss). However, the Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results.

The contractual maturities of cash equivalents (excluding money market funds which have no maturity) and marketable securities are summarized as follows:



(In thousands)	March 31, 2022
Due less than one year	$	65,210
Due from one year through three years	109,127
Total	$	174,337

Refer to Note 8, “Fair Value of Financial Instruments,” for discussion regarding the fair value of the Company’s cash equivalents and marketable securities.

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8. Fair Value of Financial Instruments

The following table presents the financial instruments that are carried at fair value and summarizes the valuation of its cash equivalents and marketable securities by the below pricing levels as of March 31, 2022 and December 31, 2021:

As of March 31, 2022

(In thousands)

Total

Quoted Market Prices in Active Markets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Money market funds

6,058