Rambus shares fall 2% after first-quarter profit and revenue miss expectations

San Jose, California – Rambas . Nasdaq (NASDAQ: ), a prominent provider of chips and IP that makes data faster and more secure, disclosed financial results for the first quarter ended March 31, 2024, which fell short of Wall Street expectations.

The company reported adjusted earnings of $0.30 per share, missing analysts' average estimate of $0.44. Revenue of $117.9 million was reported, also missing the consensus estimate of $132 million.

The first-quarter results were significantly different from analysts' expectations, and the stock price reacted negatively, falling 2.4% after the earnings report was released.

Rambus' product revenue declined from $63.8 million in the first quarter of 2023 to $50.4 million in the same quarter of 2024, compared to the same period last year. million, primarily due to an increase in royalties from $28.2 million to $47.5 million.

Commenting on this quarter's results, Rambus CEO Luc Seraphin said: “We delivered solid first quarter results through strong execution and strategic focus on data centers and artificial intelligence.” He emphasized the company's transparency We expand market opportunities through the introduction of new products and are committed to driving long-term profitable growth while returning value to shareholders.

Looking ahead, Rambus provided an outlook for the second quarter of 2024, with licensing fees expected to be between $61 million and $67 million, and product revenue expected to be between $52 million and $58 million. The company also expects contract and other revenue to be in the range of $17 million to $23 million. Operating costs and expenses are expected to be in the range of $95 million to $91 million, and non-GAAP operating costs and expenses are expected to be in the range of $80 million to $76 million.

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The midpoint of licensing billing and product revenue guidance shows a stable outlook, closely tied to prior performance. However, specific revenue guidance will be discussed in the company's upcoming conference call.

Rambus remains focused on its strategic initiatives, completing a $50 million accelerated stock repurchase program and launching a new DDR5 PMIC family for artificial intelligence and traditional servers, solidifying its position in the data center market.

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