Rambus. Bringing invention to market. November 2013

Transcription

1 Rambus Bringing invention to market November 2013

2 Safe Harbor This presentation will contain forward-looking statements regarding our financial prospects, the anticipated benefits of, and the potential demand for our offerings, as well as the timing and expected launch of our offerings, among other things. Such forward looking statements are based on current expectations, estimates and projections about the Company s target market opportunities, and management s beliefs and assumptions. These statements are subject to risks and uncertainties, which are more fully described in the documents that we file with the SEC, including our 10- Ks, 10-Qs and 8-Ks, and these statements may differ materially from our actual results. This presentation may contain non-gaap financial measures. Reconciliations of these non-gaap financial measures to the most directly comparable measures calculated in accordance with GAAP are posted on our website at Rambus Inc.

3 Company Overview

4 $ in M $ in M Company Overview Technology company specializing in highspeed memory and interfaces, security, and LED lighting Approximately 470 employees (70% engineers) Development teams in Sunnyvale, San Francisco, Chapel Hill, Brecksville and Bangalore Deep expertise in focus areas, protected with broad patent portfolio Inventions applicable in broad set of applications As of Q3 2013, 1868 issued patents and 893 patent applications High gross margin and recurring royalties through patent and technology licensing Q3 13 LTM CLI of $269M, current market capitalization ~$1B LTM Customer Licensing Income LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 Pro Forma Net Income 2 (LTM) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 1 Customer Licensing Income (CLI) is a non-gaap number, defined as total cash royalties received from customers under its licensing agreement with them. Includes Royalties received but not recognized as revenue and proceeds from sale of intellectual property. 1,2 Refer to non-gaap to GAAP reconciliation on page 31.

5 Evolving Strategy Company of inventors Bringing invention to market Memory industry focus Diversified to memory, security, LED lighting Patent enforcement Solutions and IP licensing Litigious relationships Collaborative engagements Continue core strength in developing advanced technologies Rambus Inc.

6 How We Engage with Customers Rambus Inc.

7 Collaboration Snapshot Bringing invention to market Rambus Inc.

8 Key Businesses and Rambus Labs Memory and Interfaces High performance, low power CLI Split (LTM Q3 2013) Cryptography Research World s leading semiconductor security Lighting and Displays Revolutionizing LED lighting 88% 12% New Business MID Rambus Labs Inventing for tomorrow Rambus Inc.

9 Memory and Interfaces (MID) Memory and serial link interfaces to help customers differentiate with high performance, low-power solutions and design services

10 Expertise is Critical to Silicon Success Core Expertise Mixed-signal design Signal and power integrity Complete channel modeling In-situ test Advanced process experience 20+ years of experience in systemaware PHY design, ensuring highquality designs and inventions Market Benefits Mobile Increased battery life Reduced weight HD image and video capture Improved graphics Higher resolution displays Faster time-to-market Cloud Faster response times Reduced power consumption Increased storage Reduced system cost Lower total cost of ownership Rambus Inc.

11 DRAM Licensees Approximately 78 1 % of the DRAM industry licensed 78% 1 Based on DRAMeXchange Q market share estimates Rambus Inc.

12 R+ Cores: Standards Compliant but Better Enables engagement with broader market Next-generation performance and backwards compatibility Rambus Inc.

13 Cryptography Research (CRI) World's A leading leading semiconductor semiconductor security security R&D and R&D licensing and licensing company company with with more more than than 7 billion 6 billion security security devices products under license under annually license

14 Key Extraction Poses Major Security Issue DPA Countermeasures protect hardware, software, and protocols with portfolio of innovations along with training, evaluation services, analysis equipment Rambus Inc.

15 Security Solutions for the Connected World Fundamental innovations for securing semiconductors and electronic systems Differential Power Analysis (DPA) Patents and innovations for Countermeasures Tamper-resistant devices can have secret keys extracted using statistical analysis of power consumption data Fundamental patents for DPA countermeasures protecting hardware, software, and protocols CryptoFirewall SoC IP solutions Content security and anti-counterfeiting Product authentication to prevent counterfeiting of high margin products and services Protects hardware, software, manufacturing flow, branding, and revenue Rambus Inc.

16 Solving Counterfeiting Issue CryptoFirewall core helps protect consumable and peripheral markets Cost-effective anti-counterfeiting for consumables Protection against peripheral cloning The Consumable CryptoFirewall (CCF) is on the consumable and authenticates usage Firmware running on the SoC (or a separate CryptoFirewall core on the SoC) authenticates the CCF and regulates printing using Verifier CryptoFirewall (VCF) Peripheral chips authenticated by SoC to detect counterfeits PCF Communications interface (untrusted) carries data between firmware and CCFs 25% of $60B consumable market is cloned. CryptoFirewall CryptoFirewall solution solution handles authentication handles authentication and secure and usage secure tracking usage tracking. CryptoFirewall TM Stops sophisticated counterfeiters with strong reverse engineering capabilities, prevents attacks and makes attacks cost-prohibitive to repeat Extremely high tamper resistance, Extremely protects secrets high tamper in hostile resistance, environments protects secrets in hostile environments Rambus Inc.

17 Lighting and Display (LDT) LED invention in revolutionary products Bulbs with inviting light output of a traditional incandescent and exceptionally low power and long life. Fixtures that are elegant and beautiful with remarkable efficiency and light distribution.

18 Our Core Expertise: Managing Light MicroLens Optics TruEdge Technology SolidCore Reflectors Enables precise control of uniformity, exit angle, and spread of light Optimizes LED-to-light guide interface while maximizing coupling efficiency Highly-efficient, compact molded reflectors produce tightly-controlled, highintensity, beams Rambus Inc.

19 Changing the Face of LED Fixtures Fern Howard Archer GE Lumination GE Lumination Linear Suspended LED luminaires, featuring Rambus technology, change the face of retail lighting in UK s 40,000 sq. ft. Sainsbury grocery store Source: Cooper Lighting Metalux WaveStream Rambus Inc.

20 Revolutionary LED Bulbs Highly efficient, innovative new bulbs Color Temperature Change (CTC) technology enables color adjustment from warm to neutral to cool with the turn of a dial - illuminating every application in its best light Warm Neutral Cool LED(s) Channel Distributor Adjustable remote phosphor CTC Light Engine Rambus Inc.

21 Rambus Labs Identify. Invent. Innovate. Identifying disruptions and opportunities in traditional and new markets to create inventions that fuel tomorrow s products

22 Focused Research Programs for Growth Rambus Inc.

23 Financial Overview

24 $ in M $ in M Recent Financial Results Diversifying royalties Quarterly Customer Licensing Income LTM Customer Licensing Income Q Q Q Q Q Q LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 New Business MID New Business MID $ in M, certain amounts may be off $1M due to rounding 1 Customer Licensing Income (CLI) is a non-gaap number, defined as total cash royalties received from customers under its licensing agreement with them. Includes Royalties received but not recognized as revenue and proceeds from sale of intellectual property Rambus Inc.

25 Sources of Customer Licensing Income Customer Licensing Income ($M) LTM Q3'13 Patent License Royalties 232 Driven by multi-year licensing contracts Solutions License Royalties 19 Contract Revenue 4 Other Patent Royalties Received 14 Total 269 Ratio of fixed to floating payments was 48/52 in Q3 13 $ in M, certain amounts may be off $1M due to rounding Rambus Inc.

26 $ in M $ in M Litigation Expenses and Profitability Pro-Forma EBITDA 1 & EBITDA Margin Litigation Expense (LTM) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3' % 33% 29% 23% LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 40% 35% 30% 25% 20% 15% 10% 5% 0% Pro Forma EBITDA (LTM) EBITDA Margin 1 Pro Forma EBITDA is a non-gaap number, defined as Pro Forma Operating Income + Depreciation Rambus Inc.

27 Sources of CLI Diversification accounts for roughly 12% of overall revenue mix New Business as a % of CLI DRAM patent royalties as a % of CLI 120% 60% 100% 50% 80% 40% 60% 40% 30% 20% 46% 42% 46% 38% 46% 56% 20% 0% 9% 7% 10% 15% 14% 11% Q Q Q Q Q Q % 0% Q Q Q Q Q Q New Business MID Rambus Inc.

28 $ in M Cash Balance Cash and Marketable Securities* Q Q Q Q Q *$138M convertible note issued in August 2013 reflected in Q cash balance Rambus Inc.

29 Investment Thesis Focused on collaboration and building a technology licensing franchise Historical litigation issues largely resolved, bringing stability going forward Long-term contracts with customers Stable source of Customer Licensing Income 48% fixed as of Q Approximately 78% of the DRAM industry is licensed Potential upside from new businesses Security solutions for set-top boxes and mobile devices driving growth Unique product solutions in LED bulbs and light fixtures Rambus Inc.

30 Reconciliation of non-gaap Financial Measures Quarterly Customer Licensing Income ($ in M) Q Q Q Q Q Q Revenue Adjustments (Other patent royalties received) Customer Licensing Income LTM Customer Licensing Income ($ in M) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 Revenue Adjustments (Other patent royalties received) Customer Licensing Income LTM Litigation Expense ($ in M) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 GAAP Litigation Expense (1) Adjustments (Other one-time events) Pro Forma Litigation Expense LTM Net Income ($ in M) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 GAAP Net Loss (134) (117) (92) (40) Adjustments: Other patent royalties received Stock-based compensation Acquisition-related transaction costs & retention bonuses Amortization Costs of restatement and related legal activities Other one-time events Non-cash interest expense Provision for (benefit from) income taxes 5 0 (3) (6) Pro Forma Net Income LTM EBITDA ($ in M) LTM Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 GAAP Operating Loss (90) (71) (44) 12 Adjustments: Other patent royalties received Stock-based compensation Acquisition-related transaction costs & retention bonuses Amortization Costs of restatement and related legal activities Other one-time events Pro Forma Operating Income Depreciation Pro Forma EBITDA Certain amounts may be off due to rounding.

31 Thank you