Rambus Inc (RMBS) Q4 2025 Earnings Call Transcript

Rambus Inc (NASDAQ: RMBS) Q4 2025 Earnings Call dated Feb. 02, 2026

Corporate Participants:

Luc Seraphin — Interim CEO and Acting General Manager of the Memory and Interface Division

Desmond Lynch — Senior Vice President, Chief Financial Officer

Analysts:

Unidentified Participant

Kevin Cassidy — Analyst

Aaron Rakers — Analyst

Bastian Falcon — Analyst

Gary Mobley — Analyst

Sebastian Naji — Analyst

Presentation:

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operator

Welcome to the Rhombus fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen only mode. At the conclusion of our prepared remarks, we will conduct a question and answer session. If you would like to ask a question, you may press Star one on your touchtone phone at any time. If anyone should require assistance during the conference, please press Star zero at any time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Desmond Lynch, Chief Financial Officer. You may begin your conference.

Desmond Lynch — Senior Vice President, Chief Financial Officer

Thank you operator and welcome to the Rambus Fourth Quarter and Fiscal Year 2025 Results Conference Call. I am Desmond Lynch, Chief Financial Officer at Rambas and on the call with me today is Luke Seraphin, our CEO. The press release for the results that we will be discussing today has been filed with the SEC on form. We are webcasting this call along with the slides that we will reference during portions of today’s call. A replay of this call can be accessed on our website beginning today at 5:00pm Pacific Time. Our discussion today will contain forward looking statements including our expectations regarding projected financial results, financial prospects, market growth, demand for our solutions, other market factors including reflections of the geopolitical and macroeconomic environment, and the effects of ASC606 and reported revenue, amongst other items.

These statements are subject to risks and uncertainties that may be discussed during this call and are more fully described in the documents we file with the SEC, including our 8Ks, 10Qs and 10Ks. These forward looking statements may differ materially from our actual results and we are under no obligation to update these statements. In an effort to provide greater clarity in the financials, we are using both GAAP and non GAAP financial presentations in both our press release and 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@rambus.com on the investor Relations page under Financial Releases.

In addition, 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 and then we will end with Q and A. I’ll now turn the call over to Luke to provide an overview of the quarter.

Luc Seraphin — Interim CEO and Acting General Manager of the Memory and Interface Division

Luke thank you Des. Good afternoon everyone and thank you for joining us. 2025 was an excellent year for Rhombus. We closed with a strong Q4 and finished the full year with record revenue and earnings. Our financial success is a testament to both our strategy and execution as we continue to deliver products and technologies that accelerate memory, compute and connectivity advancements in rapidly growing markets. Our diversified portfolio remains a core strength for the company and each of our businesses contributed meaningfully to our results as we delivered a new annual high in cash from operations. This positions us well to continue to invest strategically in our product roadmap, expand our market opportunity and drive long term growth.

Before I go into detail on our business results, let me take a moment to discuss the important market and technology trends influencing our strategy and highlight several of our key accomplishments in 2025. Both AI and traditional server markets remained strong throughout the year driven by the accelerating need for significantly higher compute and memory performance. As workloads become more complex and diverse and inference rapidly expands across applications including agentic and physical AI, the demands placed on memory subsystems continue to intensify. This environment drove further adoption of DDR5 as well as other high performance memory and interconnect technologies where Rhombus, signal and power integrity expertise are foundational.

The accelerated pace of innovation continued across the industry with customers increasingly operating on one year product cadences to stay ahead of demand for greater performance. This dynamic amplified the need for cutting edge merchant and custom solutions where our advanced technology portfolio enables accelerated design cycles for our customers. Against this backdrop, Rhombus had a number of achievements that fueled our performance in 2025 and strengthened our position across key markets as we move into 2026. We furthered our leadership in DDR5 with increased market share in RCDs reflecting both the depth of our expertise and the continued trust of our customers.

Our power management chips made meaningful progress with growing adoption of our DDR5PMIX contributing to revenue growth. We extended our reach in high performance and AI PCs through the introduction of our complete client chipset. With this addition, Rhombus offers a comprehensive chipset portfolio that supports all JEDEC standard DDR5 and LPDDR5 modules across server and client systems. With that, we offer customers greater assurance of interoperability and reliable performance at scale. And finally, in addition to these chip milestones, we saw increasing design wins and customer engagement led by our latest generation HBM4, GDVR7 and PCIe7 digital IP as well as our broad range of security IP to safeguard data transmission and storage.

Turning now to our quarterly business results, Chip capped off the year with a strong Q4 performance, delivering product revenue of $97 million. This brought us to a new annual record of $348 million which was up 41% year over year. This achievement reflects our continued product leadership and ongoing market share gains in DDR5 RCDs. In addition, customer adoption of new products continues to progress with growing revenue contributions and volume shimpulms underway. For Silicon ip, we are strategically focused on delivering industry leading solutions that empower the next wave of AI hardware. The increasing pace and diversity of AI chip designs including custom silicon for hyperscalers is driving design wins for high speed memory, Interconnect and Security IP.

With market leadership and expertise across multiple generations of HBM, GDDR and PCIe as well as our best in class security solutions, our IP is a critical enabler of the performance required by AI workloads. We see strong traction across our portfolio of cutting edge solutions. In particular, there’s growing demand for our interface and security IP solutions as we see the increased need to move and secure data in scale up and scale out scenarios. Looking ahead, the ongoing expansion of AI and the transformation of the data center continues to reshape memory and interconnect requirements. AI training and inference at scale are driving increased demand for bandwidth capacity and power efficient performance.

The expansion of agentic AI is catalyzing traditional CPU based server demand and continues to drive the need for more DIMMs per system, higher speed interfaces and sophisticated power management. Our product and IP sit at the core of this transition, enabling the massive compute infrastructure required for increasingly complex and diverse AI models. In addition, the rise of purpose built systems and increasingly heterogeneous compute is accelerating the adoption of new memory architectures, higher data rates and advanced security solutions. All of these trends play directly to RMBA’s strength, open opportunities to broaden our leadership across next generation platforms and reinforce the long term tailwinds for our businesses.

Rhombus is well positioned to capitalize on these Trends and in 2026 we expect to grow faster than market. Now, as reflected in our Q1 outlook, we experienced a one time supply chain issue that will affect product revenue for Q1. The issue is being resolved in collaboration with our supply chain partners and we expect our product business to return to strong growth in the second quarter fueled by market share gains and the continued ramp of new products. I am confident in our long term trajectory for 2026 and beyond. As always, I want to thank our customers, partners and employees for their continued support.

With that, I’ll turn the call over to DES to walk through the financials.

Desmond Lynch — Senior Vice President, Chief Financial Officer

Des, thank you Luke. I’d like to begin with a summary of our financial results for the fourth quarter and for the full year 2025. On Slide 3, we delivered strong financial results in both the fourth quarter and full year 2025 as we continue to execute on our long term growth strategy. Full year revenue and earnings per share reached record levels driven by a 41% increase in product revenue to $348 million due to DDR5 market share gains and new product contributions. In 2025 we generated a company record $360 million in cash from operations which was up 56% from 2024.

Our established track record of generating cash enables us to invest in initiatives that fuel our long term growth. Let me now provide you a summary of our non GAAP income statement on Slide 5. Revenue for the fourth quarter was $190.2 million, which is above our expectations. Royalty revenue was $71.7 million while licensing billings were $71.5 million. Product revenue was $96.8 million as we delivered another quarter of record product revenue. This represents 32% year over year growth driven by continued strength in DDR5 products and ramping new product contributions. For the full year we delivered $347.8 million in product revenue which was a new for the company.

Contract and other revenue was $21.8 million consisting predominantly of silicon IP. As a reminder, only a portion of our silicon IP revenue is reflected in contract and other revenue and the remaining portion is reported in royalty revenue as well as in licensing billings. Total operating costs including cost of goods sold for the quarter were $103.2 million. Operating expenses of $64.9 million were in line with our expectations and flat compared to Q3. Interest and other income for the fourth quarter was $6.4 million using an assumed flat tax rate of 20% for non GAAP pre tax income.

Non GAAP net income for the quarter was $74.7 million. Now let me turn to the balance sheet details in slide 6. We ended the quarter with cash, cash equivalents and marketable securities totaling $761.8 million, up from Q3 primarily driven by record cash from operations of $99.8 million. Fourth quarter capital expenditures were $8.6 million. Depreciation expense was $8.4 million. Free cash flow in the quarter was $91.2 million and for the full year we delivered $320.9 million or 45% free cash flow margin. Let me now review our non GAAP outlook for the first quarter on Slide 7.

As a reminder, the forward looking guidance reflects our best estimates at this time and our actual results could differ MA from what I am about to review. In addition to the non GAAP financial outlook under ASC 606, we also provide information on licensing billings, which is an operational metric that reflects amounts invoiced to our licensing customers during the period, adjusted for certain differences. We expect revenue in the first quarter to be between 172 and $178 million. We expect royalty revenue to be between 61 and $67 million and licensing billings between 66 and $72 million. As Luke mentioned earlier, our Q1 product revenue is impacted by a supply chain issue which has been resolved and we expect resumption of growth from the second quarter onwards.

We expect Q1 non GAAP total operating costs, which includes COGS to be between $104,000 and $100 million. We expect Q1 capital expenditures to be approximately $13 million. Non GAAP operating results for the first quarter are expected to be between a profit of 68 and $78 million. For non GAAP interest and other income and expense we expect 6 million DOL income. We expect our pro forma tax rate for 2026 will be 16%. Driven by tax legislation changes last year, we expect non GAAP tax expenses to be between 11.8 and $13.4 million. In Q1 we expect Q1 share count to be 110 million diluted shares outstanding.

Overall, we anticipate the Q1 non GAAP earnings per share range between 56 and 64 cents. Let me finish with a summary on slide 8. In closing, I am pleased with our excellent 2025 financial performance and the continued progress we are making against our strategic goals. We delivered record top line revenue growth resulting in record profitability and cash generation. Our diversified portfolio continues to be a core strength for the company. First, patent licensing continues to deliver consistent and predictable results. Also, our silicon IP portfolio is well positioned to address the accelerating demand for AI solutions. In addition, our product business continues to drive our growth with strong leadership and market share gains in our core core RCD business which is complemented by our expanding new product contributions.

Overall, we are well positioned to drive long term shareholder value. Before I open up the call to Q and A, I would like to thank our employees for their continued teamwork and execution. With that, I’ll turn the call back to our operator. To begin Q and A, could we.

operator

Have our first question?

Questions and Answers:

operator

Thank you ladies and gentlemen. If you have a question, please press Star one on your touchtone phone. The first question comes from Kevin Cassidy with Rosenblatt. You may proceed.

Kevin Cassidy

Yes, thanks for taking my question and congratulations on the great results. But of course the questions will be around the supply chain issue and then you’ve resolved the issue. Will there be catch up up meaning in the second quarter? Can you make up for that revenue loss in the first quarter or is that just lost to market share, a competitor picking up the business?

Luc Seraphin

Thank you, Kevin. Let me maybe take a few minutes to explain what the supply issue is so that we understand the dynamics in the, in the market. So in Q4, as we said, we identified the back end manufacturing issue with one of our OSATs. We have identified the root cause of that issue and we have implemented all the corrective actions in collaboration with our supply chain partners. And before I go into a detail, note that the issue was affecting an extremely low number of parts, which made the identification of the root cause a bit difficult because it was hard to reproduce.

But we have identified the root cause, we’ve put the measures in place, and in reality what we’ve done is we’ve done two things. The first thing we’ve done is once the root cause was identified and the corrective actions were in place, we did actually pull forward fresh material from inventory that was originally staged for Q1 to meet our Q4 customer demand because our customer demand remained very strong in Q4. So that’s the first thing we did, we accelerated fresh material once these measures were in place. The second thing we did is despite the very, very low PPMs that we observed, and because quality is paramount out of abundance of precaution, we actually quarantined all potentially impacted production material.

And now we’re retesting this material with enhanced screens in place. So these measures have put additional strain on capacity in a tighter supply environment and that impacts Q1 as we said. But the issue was identified in Q4. We accelerated material through. After we put the measures in place, we are rescreening parts that were potentially tainted and that’s what’s creating that issue in Q1. So that issue is behind us. And the lower Q1 product revenue does not change the trajectory of the business. You know, we expect the business to return to strong growth in Q2 and the product revenue for 2026 remain on track to grow faster than market.

And you know, that’s, that’s how I would qualify the issue. Dav. I don’t know whether we’re going to add anything to this.

Desmond Lynch

No, I think you summarized it well, Luke. You know, the issue in Q1 is behind us and we’re expecting strong recovery both in Q2 and also for the full year. And as you said, we do expect the business to grow f than market for the year. So we’re very well positioned from here.

Kevin Cassidy

Okay, great. Thanks for that detailed explanation. You know, maybe a more difficult question, but what, what can you quantify what the revenue would have been?

Desmond Lynch

Hi Kevin, it’s Des. You know, what I would say is that, you know, the impact would probably have been around low double digit million impact in what’s already a seasonally soft quarter for the business. So that’s how I would sort of quantify the sort of Q1 revenue impact from there. As Luke mentioned, you know, we will build inventory by the end of sort of Q1 and we’ll be in a position to return to strong growth in Q2 from there. But I would say quantification probably in the low double digit million impact is what I would say kept.

Kevin Cassidy

Okay, great. Thank you for that help.

Luc Seraphin

Thanks, Kevin.

operator

Thank you. The following comes from Kevin Garrigan with Jefferies. You may proceed.

Kevin Cassidy

Hey guys, thanks for taking my question. Hey, can you just talk about how your RCD market share finished for 2020?

Luc Seraphin

Yes.

Luc Seraphin

Thanks, Kevin.

Luc Seraphin

So, you know, we believe that we ended up the year in the mid 40% share. You know, for DDR5. We, you know, we put the market, you know, between 24 and 25, you know, grew mid single digit, but the portion of DDR5 became more important. You know, DDR4 continues to decrease in terms of share. So, you know, in 2024, we were in the early 40s for DDR5. You know, in 2025, we believe we are in the mid-40s on DDR5. We’re in a market where DDR5 dominates even more. And I think as we said on the prepared remarks, you know, we expect to continue to grow faster than market in 2026, despite the glitch we had in Q1.

Kevin Cassidy

Okay, perfect. I appreciate that color. And then just as a, as a follow up. So there’s a lot going on with the Intel Diamond Rapids platform and even the AMD Venice platform. So just kind of wondering if the timeline and opportunity that you’re expecting on the Mr. Dimm front hasn’t changed at all.

Desmond Lynch

Thanks, Kevin. No, it hasn’t. We are monitoring the rollout of these platforms as every generation has been the same dynamic. The rollout of our products mostly depend on the rollout of the platforms on intel and amd. So, you know, we expect our MRD to ramp towards you know, the very end of the year at this point in time. But we will modulate that based on, you know, how the platforms rollout from both intel and AMD are happening. I think that’s nothing new. This has happened in every generation in the past. We are, you know, we are readying our products.

We are working with the, with the ecosystem to make sure that we are ready. But eventually, you know, that will depend on when those platforms roll out. As far as we’re concerned, you know, we are, you know, we’re ready.

Kevin Cassidy

Okay, perfect. I appreciate the color and congrats on the results.

Desmond Lynch

Thank you.

operator

Thank you. The next question comes from Aaron Rakers with Wells Fargo. You may proceed.

Aaron Rakers

Yeah, thanks for taking the questions. I’ve got a couple if I can as well. I guess first of all, going back to the supply chain issue. Yeah. I can appreciate, you know, that the issues have been rectified. I know, Luke, you’ve referenced a couple times growing faster than the market. So, you know, I guess the question I have is how do you define the growth rate of the market? We’ve seen a lot of data points where server demand looks like it might be as much as mid teens, maybe even high teens. And some of the commentary recently, so, so I’m curious if you can just kind of contextualize what you think the market growth rate is in 2026 underpinning your expectation of growing faster than that.

Luc Seraphin

Yeah, thanks, Aaron. We see a wide range of numbers for the market growth. Typically, as you know, there are many variables going into this. One of the basis is really the market for server servers. You know, the analysts, the marketing analysts, you know, have a range for market servers. Gartner is at 8%. You know, we hear from other sources that, you know, this could be, as you said, you know, double digit growth. But you know, we want to stay prudent with the, you know, the view of the server growth because we believe the demand is here.

But I think, you know, some people tend to underestimate the impact of potential shortage, you know, especially on the memory side. So, you know, we tend to align with Gartner’s U with, you know, 8, 8% market growth for the servers. So we certainly, you know, exceed that. But you have other things happening. You know, the number of channels increasing, you know, the introduction of new platforms. You know, in our case, you know, we also are introducing our new products, so we’re going to be higher than that. But the basis we use is mid to high single digit growth for the server market.

That’s Our basis.

Aaron Rakers

Okay, that’s very helpful. And then kind of sticking with that when we talk about your companionship opportunities. I think last quarter you talked about the PMIC being, I want to say, with mid single digit contribution to your total product revenue. Can you unpack that a little bit? How fast is that growing? What’s the expectations for this year? Thank you.

Desmond Lynch

Hi Arden, it’s Dev here. We’re really pleased with the progress and traction that our new products continue to make in the market. Our new products have grown from low single digit contribution in the first half of 25 to upper single digits in Q4, which was in line with our expectations. As we look ahead to Q1, I do expect the strong traction really to continue where I do expect new products will continue to be. It’ll grow to about double digit contribution of total product revenue. We have traction across all of our products, but I would say that in terms of revenue contribution, PEMIC remains the largest contributor there.

Our customers continue to place value and importance of the interoperability between RCD and Pemake. And as we look ahead into 26 with the continued rollout of new platforms, I would say that our new products are very well positioned within the market to continue to grow and take market share.

Aaron Rakers

Yeah.

Aaron Rakers

Thank you guys.

Desmond Lynch

Thanks Alan.

Luc Seraphin

Thank you.

operator

Thank you. The next question comes from Bastian Falcon with Susquehanna. You may proceed.

Bastian Falcon

Hi guys, thanks for taking my question. I guess one question that I have is revisiting the average of the DIMMs per CPU expected in 2027 and you mentioned it previously. Given the cost of memory and the shortage, has this changed your expectations of how many channels are being populated with DIMMs per CPU? And I have a follow up.

Luc Seraphin

Thanks Sebastian for your question. The dims for CPU dynamic is a complex one. Typically what happens is people who want very high bandwidth, like in AI types of applications and tend to use fewer DIMMs per channel so that they can make the best use of these bandwidth. And people who are in need of more capacity tend to populate more DIMMs, you know, on their channels. And then you combine this with, you know, the respective growth of standard applications with AI applications. So we continue to see you know, on average the number of dims per channel growing.

It’s. It’s a bit difficult to, it’s a bit difficult to really put a number on. I think the memory situation is a broader situation than the number of beams per channel. You know, I think thank God memory is booming these days. There’s dynamic between HBM and standard DDR, for example, and you know, with a standard DDR there’s dynamic between the different speeds of these DDR. So I think, you know, overall we believe that the market is going to be constrained. But again, trying to put a number on how, you know, the supply constraints on the memory side is going to impact the number of DIMMs per channel is something that is quite, quite difficult to figure out.

Bastian Falcon

Right, that is very helpful. And I have a follow up in terms of our City contribution. You know, what are your expectations of the DDR5 Gen 3 RCD contribution relative to the Gen 1 and 2 in 2026, given the supply chain issue that you’ve encountered with your RCDs that will be impacting Q1?

Luc Seraphin

Yeah, that’s a good question. Thank you. What we saw is in Q4 Gen 2 was predominant. You know, this is what we were expecting and Gen 3 was starting to ramp. It was growing in Q4 compared to Q3. You know, when we look at 2026, our view is that Gen 3 will continue to grow and will probably be the predominant version of DDR5, you know, throughout the year. You know, Gen 4 will contribute somehow, but because this is on a different type of core, it will have more limited adoption. The big next step is going to be Gen 5 and Gen 5, you know, as we said earlier is going to depend on the introduction of the next generation platforms on intel and AMD.

So in summary, we continue to see Gen 2, Gen 3 and the mix between Gen 2 and Gen 3 is changing. Gen 3 is growing and our expectation at this point in time is that Gen 3 is going to be dominant in 2020.

Bastian Falcon

Thank you very much.

Luc Seraphin

Thank you.

operator

Thank you. The next question comes from Gary Mobley with Loop Capital. You may proceed.

Gary Mobley

Hey guys, thanks for taking my question. I had a multi part follow up question about the supply chain issue first. Do you see any reputational harm from this with your customer base? Did it impact the companionship business more than the RCD business? And I guess logically, you know, we should assume a sharp revenue recovery in Q2. Sounds like Q1 revenue would have been about 99 to $100 million, you know, which is described as seasonally weak. And therefore if you’re going to, you know, recover that revenue and gain share in the year, presumably QT revenue would have been up sequentially from that.

So can your supply chain recover to that degree that quickly to get back to the 100 million plus per quarter in product revenue?

Luc Seraphin

So thank you Gary for your questions. I’ll start with your initial questions and let Des comment On the numbers. Your first question is about the reputational risk. No, there’s no reputational risk. Actually, when we identified that issue, we had all hands on deck and we worked in close collaboration with our suppliers and our customers. I think it’s really, really important. We said over and over again over the last few years that quality management is really, really important. We had a real life example here where we identified an issue quickly. We had a very thorough quality process in place with our suppliers, with our customers, and we’re back on track.

The only issue that is left for Q1 is the fact that we need to replenish our supply chain and make the best use of our testing capacity. As we are also retesting Old Path. But the reputation has not been damaged. We’ve been able to identify the problem, fix the problem and put actions in place quite quickly. Your second question was about whether it affected the RCD or the other chips. It only affected the RCD and actually older versions of the rcd, but the companionships were not affected at all on that, you know, on the numbers.

Maybe. Des, you want to comment?

Desmond Lynch

Hi, Gary, it’s Des. In terms of the inventory, I do expect that the inventory will be replenished by the end of sort of Q1 and we’ll be able to grow the inventory to a level which will be able to support our Q2 26 demand and going forward from there. So again, as Luke talked about, you know, the issue has been contained. We continue to, to replenish our inventory as we go throughout Q1 and that will put us in a good position ending Q1 for meeting customers, demand for Q2 going forward.

Gary Mobley

Got it. So to follow up, I want to ask about Mr. Dimm. Based on what you’re seeing in timing of Venice shipments and diamond rapid shipments and sort of queuing the memory ecosystem around those two server processor launches, do you still see revenue contribution, I guess, material revenue contribution from MRDIM by the end of the calendar year?

Luc Seraphin

You know, as we said earlier, we are monitoring the, you know, the rollout of these platforms and we are continuing, you know, activities around MrDim. As we said on earlier call, we see the initial contribution towards the end of the year. That’s, you know, the very initial contribution of these platforms is going to be towards the very end of the year and the main contributions happening in 2027.

Gary Mobley

All right, thank you.

Luc Seraphin

Thanks, Yari.

operator

Thank you. The following comes from Tristan Gara with Baird. You may proceed.

Unidentified Participant

Hi, good afternoon. It looks like you started to be a bit more bullish on Your market share prospect in our city with companionships ramping. Is that the reason why we’re now seeing market share that it looks like is above what your expectation was a year ago and mid-40s? And what would be kind of the upside that you think you could get to by end of this year or even next year?

Luc Seraphin

Thanks, Tristan. The. The. I’ll make the first comment about the market share when we talk about, you know, being in the mid-40s. It’s for GDR5 RCDs, you know, so this market share gains in the year over year are really, really referring to the RCD chip. And this is the result of, you know, the increase, increased design win footprint. We were able to secure, you know, from generation to generation. You know, from before to D5 we had many more, much higher footprint. And at every generation of D5 we increased our footprint in terms of design wins.

That translates into, you know, our market share for the RCD chip. So when we mentioned that in 2025, you know, our market share was in the mid-40s, that’s on the DDR5 RCD. And you know, the DDR5 overall generation is still early in its cycle, so there’s still room to gain share, you know, in the mid-40s now we always said we could be between 40 and 50. So we’re still changing more share, you know, on the DDR5 RCD chip, you know, the companion chips are an addition to this, you know, and they’re ramping steadily, slowly, you know, as Dev explained, you know, into the market as the qualifications take place.

But this is going to be additional revenue to the RCD revenue.

Unidentified Participant

Yeah. And I was just wondering if the fact that you have companionship, does that help your RCD share or is that completely separate? I sense that perhaps you saw some cross setting opportunities or benefits that will go beyond just additional time of the companionship. And then also my follow up question is if there’s any update on the potential SOCAN2 opportunity, whether it’s in the current Blackwell platform or the upcoming platform for you to potentially participate.

Luc Seraphin

Yes, I’ll answer first on the companionship, the time. Yeah, one way to look at it, as you rightly say, is to add the tams. But is there a connection between the two? There’s an indirect impact. You know, as the speeds on the DIMMs continue to increase, it is more and more important for our customers to get their chips from the same supplier for interoperability reasons. You know, these systems are very, very complex and you know, if we have all chips in house, we can do a lot of system testing before shipping those parts to our customers.

So that puts us in a favorable, you know, position. So there’s a positive indirect impact, you know, on our ability to grow our PMIC in particular, but also the other companionships as the speeds on the RCD continue to increase. So that’s the answer on that. On the SoCam, you know, we continue to monitor, you know, the dynamic there. You know, on the SoCam there’s definitely, you know, an SPD opportunity. On the SOCAM for Russia, you know, we’re talking about next generations and how, you know, these next generations can evolve in particular in this, in the field of power management that could open, you know, other opportunities in the future.

But I would say this, as we said in the prepared remarks, you know, we, our strategy is to have solutions for every JedX standard module, whether, you know, it’s on the client side or whether it’s on the, you know, on the data center side. So we will continue to monitor what’s happening with SoCam. On SoCam 2, we have an opportunity for the SPD hub as the evolution of SOCAM continues and new chips are being defined. We’re going to be part of that definition and we’ll continue to develop chips to support that market.

Unidentified Participant

Great, thank you very much.

Luc Seraphin

Thank you, Tristan.

operator

Thank you. The next question comes from Sebastian Naji with William Blair. You may proceed. Steve?

Sebastian Naji

Yeah, thank you for taking the question. Could you maybe remind us how much of your product business today is not related to the server market? You mentioned some early success in the client market. And as we think about 2026, does rising memory cost maybe create some friction in this part of the market for Rambus?

Luc Seraphin

The client market remains minimal for us at this point in time for a couple of reasons. One is, is the adoption of the CKD chip or the equivalent of the clock chip into the client space really is limited to the very, very high end parts of that client space. So the contribution is minimal in terms of numbers. Our goal is still to get 20% share in the long run for that. But these platforms have to, you know, ramp in the market. Their contribution are still going to be minimal in, you know, even in 2026 for clients.

So the vast majority of the business is in the, in the data center space. But this being said, you know, in the long run the power management and the clock management are going to be very, very important in the client space as well. It’s important for us to position ourselves there, there and to have solutions for all you know, platforms. So that’s why we are, we’re doing this in, in terms of, in, in terms of the client space. And your second question was?

Sebastian Naji

That was, that was my first question.

Luc Seraphin

That was your question. Okay, thank.

Sebastian Naji

Yeah.

Unidentified Participant

IP side of the business.

Luc Seraphin

Okay, so.

Sebastian Naji

So, you know, Rambus has benefited a lot from the explosion in the number of ASICS that are being designed. You have many companies attempting to design their own X. Also seen an accelerated cadence of new chip releases as we go into 2026. Are you seeing any signs of a slowdown in some of these new chip design starts or that could start to impact your IP business?

Luc Seraphin

Well.

Luc Seraphin

You want to go with this? Go ahead.

Desmond Lynch

Yeah, I’ll start. Martin, maybe you can add on. We were very pleased with how our Silicon IT business performed in 2025. It performed in line with their expectations and the portfolio is positioned to address the demand for AI solutions from there. If you look at our portfolio, we have a leading edge portfolio with critical IP solutions and the high speed memory, interconnect and security IP which is tailored towards the AI sort of workloads from there. And our expectation is that that would continue to grow in 2026 in line with our long term growth expectations from there.

So very bullish on our overall sort of portfolio and outlook for the IP business. Great, thank you. Thanks.

operator

The following is a follow up from Kevin Cassidy with Rosen Bland. You may proceed.

Kevin Cassidy

Yeah, thanks for taking my follow up. And maybe along those lines of custom. Luke, I think you had mentioned custom hardware and I wonder if you could give us a little more details on that is how many customers can you support and what would be the timing of that?

Luc Seraphin

Yes, when we say custom hardware, there are a lot of people who are developing their own chips, you know, for their AI infrastructure or the server infrastructure, typically, you know, accelerators, you know, chips that are dedicated to inference and these kind of things. So every time they do develop those type of channels chips, you know, they have a potential need for HBM and at high speed pca, at high speed or security solutions, GDDR sometimes. So as you know, we position our portfolio to be at the high end of those standards. So we typically talk to the people who work, you know, at the high end of those systems.

We can support a large number of customers. Customers because we have a limited portfolio in terms of the scope, you know, we focus on PCIe, CXL, HBM, GDDR, you know, and, and security, IP. So we have a laser focused portfolio that addresses, you know, potentially a large number of customers who are working on the leading edge of those, of those technologies. That’s, that’s really what’s driving, you know, the business for us as opposed to, to potentially other IP suppliers have a much broader portfolio. We narrow our portfolio for the needs of people who develop chips for the data center.

And most of these chips are either their own processors. Some people develop their own processors as opposed to buying merchant processors. Other types of applications are accelerators to improve the performance of this.

Kevin Cassidy

Okay, great. Thank you.

operator

Thank you. We have another follow up from Ann Rakers with Wells Fargo. You may proceed.

Aaron Rakers

Yeah, thanks for taking a follow up question. I guess the first one is, you know, Luke, you mentioned like, you know, there is risk in terms of memory supply and availability. I’m curious, as you look back at this last quarter or coming out of, you know, the last quarter, in these first couple weeks of this first quarter, have you seen any signs of memory constraints impacting your customers ability to fulfill demand or any, how would you characterize inventory levels that you’re seeing at some of your major customers? Any thoughts on that would be great.

Luc Seraphin

Yeah, sure. You know, we are in a small, you know, ecosystem as you know and when we talk to our customers and partners, we hear those comments, you know, and one of the comments, common theme that we hear is that, you know, the demand, you know, for servers is, is, is, is solid. You know, there’s a refresh cycle, there is a, you know, that is not over. There’s also, you know, agentic AI and all the inference applications that drive demand. But what we hear from the same customers is that they’re going to be constrained by supply.

You know, and we hear this directly from our customers. And this is why, you know, when we look at the market potential for us, you know, we tend to be prudent because we are aware, you know, of these comments, you know, from, you know, from, from, from, from our customers in terms of, in terms of supply. So that’s, that’s, you know, that’s what the basis of what our comments are. We see, you know, on the supply side we also see. Aaron, the supply, excuse me. And on the supply side we also see lengthening lead times.

It’s nothing to do with the memory guys, but there’s also, on the supply side, lead times continue to increase. And that’s why we believe in 2026 the demand is solid but we’re going to be more constrained by supply that we’re going to be by demand.

Aaron Rakers

Yeah, that’s helpful. And then des, real quickly on the gross margin line you know, I want to make sure I’m clear. Like, given the supply chain issues, you don’t expect any kind of gross margin, any kind of inventory provisions or anything of that nature. And I guess what I’m trying to get at is, you know, the product gross margin looks like it’s, you know, still hovering in that plus 60% range. Is that, is that still the expectation that we stay in that low 60% range here as we look forward? Thank you.

Desmond Lynch

Hi, Alan. Yeah, that would be the right expectation going forward. If you look at the full year of 2025, our gross margins were around 61.5%, which was in line with 2024’s performance and consistent with our long term model of 60 to 65%. I think what you will see is that we have a strong track record of delivering gross margins in line with these targets. And that would be my. If you really look where we’ve been operating in the last three years, we’ve been in a tight range of 61 to 63%. And I think that would be a fair way to think about the business in 2026 from a gross margin perspective.

We’ll continue to be disciplined in our approach to pricing. And as always, we’ll continue to drive manufacturing cost savings going forward, which enables us to drive to the gross margins within the range I mentioned earlier.

Aaron Rakers

Perfect. Thanks, Ted.

Desmond Lynch

Thanks, Alan.

operator

Thank you. At this time, there are no further questions. This concludes the question and answer session. I would now to turn the conference back over to the company.

Luc Seraphin

Thank you everyone who has joined us today for your interest and time, and we look forward to speaking with you again soon. Have a great day.

Luc Seraphin

Thank you.

operator

Thank you. This now concludes today’s conference.