Rambus, Inc.

Welcome to the RAMBIS first quarter and fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. At the conclusion of the prepared remarks, we will conduct a question and answer session. If you would like to ask a question, you may press star 1 on your touch-tone pad at any time. If anyone should require assistance during the conference, please press star zero on your touchtone pad at any time. As a reminder, this conference call is being recorded. I would like to turn the conference over to Rahul Mathur, Chief Financial Officer. Please begin your conference.

Thank you, Operator, and welcome to the RAMBUS first quarter 2021 results conference call. I'm Rahul Mathur, CFO, and on the call with me today is Luke Serafin, our CEO. The press release for the results that we will be discussing today have been furnished to the SEC on Form 8K. A replay of this call will be available for the next week at 855-859-2056. You can hear the replay by dialing the toll-free number and then entering ID number 398-5069 when you hear the prompt. In addition, we are simultaneously webcasting this call, and along with the audio, we are webcasting slides that we will reference during portions of today's call. So even if you're joining us via conference call, you may want to access the webcast with the slide presentation. A replay of this call can be accessed on our website beginning today at 5 p.m. Pacific time. Our discussion today will contain forward-looking statements, including our financial guidance for future periods, product investment strategies, timing of expected product launches, demand for existing and newly acquired technologies, the growth opportunities of the various markets we serve, the expected benefits of our merger, acquisition, and divestiture activity, including the success of our integration efforts, risks and potential adverse impacts related to or arising from COVID-19, and the effects of AC-606 on reported revenue, amongst other things. These statements are subject to risks and uncertainties that are discussed during this call and may be more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs, and 10-Ks. These forward-looking statements may differ materially from our actual results, and we're under no obligation to update these statements. In an effort to provide greater clarity to our financials, we're using both GAAP and non-GAAP financial presentations in both our press release and also on this call. A reconciliation of these non-GAAP financials to the most directly comparable GAAP measures has been included in our press release, in our slide presentation, and on our website at campus.com on the investor relations page under financial releases. We adopted ASC 606 in 2018 using the modified retrospective method, which did not restate prior periods, but rather ran the cumulative effect of the adoption through retained earnings as a beginning balance sheet adjustment. Any comparison between our results under ASC 606 and prior results under ASC 605 is not an accurate way to track the company's progress. We will continue to provide operational metrics, such as licensing billings, to give our investors better insight into our operational performance. The order of our call today will be as follows. Luke will start with an overview of the business. I will discuss our financial results, including our guidance for future periods. And then we will end with Q&A. I'll turn the call over to Luke to provide an overview of the quarter. Luke?

Thanks, Rahul, and good afternoon, everyone. Q1 was a strong quarter for the company, delivering at a high end of expectations for revenue and profitability. We continue to meet or beat expectations, and I'm very proud of the team's continued execution. Our cash generation remains strong, with $39.5 million in cash flow operations, and continues to fuel our ongoing investments in our product roadmap. As anticipated, our memory interface kit business rebounded to over $30 million, and we continue to expect our annual product growth to significantly outpace the market. We also see a positive trajectory in SiliconIP customer engagements with the opportunity to build enterprise-level relationships. Ongoing share gains and strong demand in our target markets and growth for the company with data center as the primary catalyst across all of our businesses. We are actively building our ecosystem and expanding our reach through partnerships and collaboration, and are confident in our ability to deliver profitable top-line growth. Over the past few quarters, we've discussed some of the company's vectors for growth at a high level, and I wanted to provide more detail on some of the more exciting trends shaping our roadmap and market opportunity. we see three fundamental trends that are driving growth at the market, system, and chip level. First is the accelerated transition from enterprise to cloud. Second is the sustained increase in data generation and usage. And third is the proliferation of AI and data-intensive applications across all markets. Beyond the secular growth in data center, These trends are increasing demand for performance with rising AI and AI workloads driving server growth at the system level. And at the chip level, the need for more data to feed the system is driving memory bandwidth and big growth. As a result, data delivery, particularly in the memory subsystem, is now on the critical path for meeting ongoing performance requirements. Additionally, the emergence of new architectures and growing need for privacy create the necessity for securing data at rest and in motion, where we have built an instinctive portfolio of offerings. The combination of these factors has created an amplified market opportunity and a growing time for Rambus. Our company's time expansion is driven by a number of factors. In the near term, Intel's latest DDR4 platform supports a higher maximum memory module attach rate This platform is currently ramping and will enable an optional increase in corresponding modules per box in high-end systems. As the industry transitions to DDR5 beginning later this year, the growing complexity at higher speeds will require additional companionships like temperature sensors, power management integrated circuits, also known as PMICs, and serial present detect hubs, also known as SPD hubs. Each of these provides an adjacent chip opportunity for RAMBUS, and we expect to see an increase in our portion of chip content per module. Looking to next year and beyond, the industry is converging on the use of Compute Express LIMS, or CXL, as part of a differentiated memory interface architecture, in addition to traditional DIMMs, to expand system bandwidth and capacity. we are actively engaged with the ecosystem on the design and development of the new memory interface products. And finally, as we look a bit farther out in the future, there are opportunities to leverage those same high speed links as part of new disaggregated architectures that can boost utilization and efficiency and reduce total cost of ownership for data center customers. It is also important to point out that security has become a critical concern that must be addressed at the hardware level to deliver both performance and protection in future architectures. We see a growing number of industry standards and customer requirements for security as part of chip and system specifications. As an industry pioneer with over 30 years of experience in high-speed interfaces and an extensive portfolio of security offerings, Rambus is ideally suited to address these challenges. we see many opportunities for our product roadmap and focused R&D investments to drive some expansion and expect the long-term profitable growth of the company to outpace that of the market. Now let's get back to our product business. The industry has returned to healthy memory consumption levels following the short-term inventory digestion in the second half of last year. We remain confident that we have the supply chain in place to satisfy our ongoing customer demand and support share growth. As I mentioned previously, our first quarter product revenue returns to over $30 million and will continue to build as demand for server memory is expected to remain robust throughout 2021 and into 2022. We expect our annual product growth to significantly outpace the market, driven by share gains in DDR4 and ramping volumes in DDR5. We continue to improve our market position in DDR4 through superior execution and expect incremental gains given our larger qualification footprint on Intel's most recent DDR4 platform. With respect to DDR5, we are in the leading position for qualification with our memory customers on both Intel and AMD DDR5 platforms. All of the major DRAM suppliers are shipping DDR5 modules without chips for end customer qualification. and we expect volume to ramp in the second half of the year. We continue to invest in the development of companionship for DDR5 platforms and look forward to sharing more in the near future. In closing, I'm very proud of the company's performance in the first quarter. We are well positioned for above-market growth, and I'm excited about the many opportunities this year and beyond. The health and safety of our global workforce, customers, and partners remain our top priority. We approach people, culture and diversity with the same level of passion and dedication as our technology leadership, profitability and capital investments. And we remain committed to responsible and sustainable environmental and social practices as we deliver products to our customers. With that, I turn the call over to Rahul to discuss the quarterly financial results.