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Investing.com -- Rambus Inc. (NASDAQ:RMBS) shares fell 5.3% in after-hours trading Monday after the chip and IP provider issued fourth-quarter revenue guidance that significantly missed analyst expectations, overshadowing better-than-expected third-quarter results.
The company reported third-quarter revenue of $178.5 million, exceeding analyst estimates of $176 million, with record product revenue of $93.3 million, up 40.5% YoY. Earnings per share came in at $0.63, in line with the analyst consensus of $0.63.
The company’s third-quarter operating margin decreased to 35% from 38% in the same period last year.
"Rambus delivered a very strong third quarter, with record product revenue and excellent cash from operations, while continuing to execute on our strategic roadmap," said Luc Seraphin, president and chief executive officer of Rambus. "Sustained DDR5 product leadership and ramping contributions from new products put us on track to deliver full-year product revenue growth that outpaces the market."
The company generated $88.4 million in cash from operating activities during the quarter, contributing to a cash position of $673.3 million as of September 30, an increase of $78.5 million from the previous quarter.
Licensing billings, an operational metric reflecting amounts invoiced to licensing customers, reached $66.1 million for the quarter, slightly up from $65.4 million in the same period last year. Contract and other revenue grew to $20.1 million from $15 million in the year-ago quarter.
Despite the disappointing guidance, Rambus maintained that its expertise in signal and power integrity positions it well to capitalize on data center and AI trends for long-term growth.
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