RAMBUS INC 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2024, our disclosure controls and procedures were effective. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: i. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, our management has concluded that, as of December 31, 2024, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting for the year ended December 31, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears herein. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended December 31, 2024, that materially affected, or that we believe are reasonably likely to materially affect, our internal control over financial reporting. 49 Item 9B. Other Information Securities Trading Plans of Directors and Executive Officers During our last fiscal quarter, the below directors and/or officers, as defined in Rule 16a-1(f) under the Exchange Act, adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K. Each of the Rule 10b5-1 trading arrangements were entered into during an open insider trading window and are intended to satisfy the affirmative defense in Rule 10b5-1(c)(1) under the Exchange Act and the Company’s policies regarding insider transactions. Name Title Adopted or Terminated Adoption Date Expiration Date Total Number of Shares of Common Stock Sold or to be Sold Luc Seraphin President and Chief Executive Officer Adopted December 13, 2024 December 13, 2025 Up to 174,400 John Shinn Senior Vice President and General Counsel Adopted December 13, 2024 December 13, 2025 Up to 41,764 Desmond M. Lynch Senior Vice President, Finance and Chief Financial Officer Adopted December 13, 2024 December 13, 2025 6,861 Other than as disclosed above, no other directors or officers, as defined in Rule 16a-1(f) under the Exchange Act, adopted , modified and/or terminated a “Rule 10b5-1 trading arrangement,” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K, during our last fiscal quarter. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 50 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. The information under the heading “Our Executive Officers” in Part I, Item 1 of this Annual Report on Form 10-K is also incorporated herein by reference. Item 11. Executive Compensation The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director Independence The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. Item 14. Principal Accountant Fees and Services The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. 51 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) (1) Financial Statements The following consolidated financial statements of the Registrant and Reports of Independent Registered Public Accounting Firms, are included herewith: Page Reports of Independent Registered Public Accounting Fir ms (PCAOB ID No. 185 and PCAOB ID No. 238 ) 53 Consolidated Balance Sheets as of December 31, 202 4 and 20 23 56 Consolidated Statements of Operations for the years ended December 31, 202 4 , 202 3 and 202 2 57 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202 4, 202 3 and 20 2 2 58 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 4 , 202 3 and 202 2 59 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 202 2 60 Notes to Consolidated Financial Statements 61 (a) (2) Financial Statement Schedule All schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the notes thereto. 52 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Rambus Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheet of Rambus Inc. and subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 53 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Sufficiency of audit evidence over revenue As discussed in Notes 2 and 4 to the consolidated financial statements, the Company’s revenue is generated from contracts with customers and is mainly comprised of product revenue, royalties, and contract and other revenue. The Company’s process to account for and recognize revenue differs across revenue streams. The Company recorded $556.6 million of total revenue for the year-ended December 31, 2024. We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. Evaluating the nature and extent of audit evidence obtained over each revenue stream required subjective auditor judgment due to the separate processes to account for and recognize revenue, including identification and evaluation of contract terms. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over each revenue stream. For each revenue stream, we evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue recognition process, including controls over the Company’s identification and evaluation of contract terms. We performed a software-assisted data analysis to test relationships among certain revenue transactions. For a selection of revenue transactions, we evaluated the Company’s assessment of the contract terms impacting the timing of revenue recognition. For a sample of revenue transactions, we (1) assessed the accounting for consistency with the Company’s accounting policies, including timing of revenue recognition and (2) compared the recorded amounts for consistency to underlying documentation, including customer contracts. We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. We have served as the Company’s auditor since 2024. /s/ KPMG LLP Santa Clara, California February 24, 2025 54 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Rambus Inc. Opinion on the Financial Statements We have audited the consolidated balance sheet of Rambus Inc. and its subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the two years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for convertible debt in 2022. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP San Jose, California February 23, 2024, except for the change in the manner in which the Company accounts for segments discussed in Note 3 to the consolidated financial statements, as to which the date is February 24, 2025. We served as the Company’s auditor from 1991 to 2024. 55 Table of Contents RAMBUS INC. CONSOLIDATED BALANCE SHEETS December 31, (In thousands, except shares and per share amounts) 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 99,775 $ 94,767 Marketable securities 382,023 331,077 Accounts receivable 122,813 82,925 Unbilled receivables 25,070 50,872 Inventories 44,634 36,154 Prepaids and other current assets 15,942 34,850 Total current assets 690,257 630,645 Intangible assets, net 17,059 28,769 Goodwill 286,812 286,812 Property and equipment, net 75,509 67,808 Operating lease right-of-use assets 21,454 21,497 Deferred tax assets 136,466 127,892 Income tax receivable 109,947 88,768 Other assets 5,632 6,036 Total assets $ 1,343,136 $ 1,258,227 LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 18,522 $ 18,074 Accrued salaries and benefits 19,193 17,504 Deferred revenue 19,903 17,393 Income taxes payable 1,264 5,099 Operating lease liabilities 5,617 4,453 Other current liabilities 17,313 26,598 Total current liabilities 81,812 89,121 Long-term operating lease liabilities 24,534 26,255 Long-term income taxes payable 109,383 78,947 Other long-term liabilities 6,715 25,803 Total liabilities 222,444 220,126 Commitments and contingencies (Notes 10, 13 and 19) Stockholders’ equity: Convertible preferred stock, $ 0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares as of December 31, 2024 and December 31, 2023 — — Common stock, $ 0.001 par value: Authorized: 500,000,000 shares; Issued and outstanding: 106,843,112 shares as of December 31, 2024 and 107,853,778 shares as of December 31, 2023 107 108 Additional paid in capital 1,275,505 1,324,796 Accumulated deficit ( 153,660 ) ( 285,534 ) Accumulated other comprehensive loss ( 1,260 ) ( 1,269 ) Total stockholders’ equity 1,120,692 1,038,101 Total liabilities and stockholders’ equity $ 1,343,136 $ 1,258,227 Refer to Notes to Consolidated Financial Statements 56 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, (In thousands, except per share amounts) 2024 2023 2022 Revenue: Product revenue $ 246,815 $ 224,632 $ 227,068 Royalties 226,172 150,110 139,816 Contract and other revenue 83,637 86,375 87,909 Total revenue 556,624 461,117 454,793 Cost of revenue: Cost of product revenue 95,875 84,495 88,976 Cost of contract and other revenue 3,028 5,403 4,668 Amortization of acquired intangible assets 11,204 13,524 13,935 Total cost of revenue 110,107 103,422 107,579 Gross profit 446,517 357,695 347,214 Operating expenses: Research and development 162,881 156,827 158,769 Sales, general and administrative 104,094 108,149 106,718 Amortization of acquired intangible assets 506 1,217 1,674 Restructuring and other charges — 9,368 — Gain on divestiture — ( 90,784 ) — Impairment of assets 1,071 10,045 — Change in fair value of earn-out liability ( 5,044 ) 9,234 3,111 Total operating expenses 263,508 204,056 270,272 Operating income 183,009 153,639 76,942 Interest income and other income (expense), net 18,450 11,327 7,771 Gain on sale of equity security — — 3,547 Loss on extinguishment of debt — — ( 83,626 ) Loss on fair value adjustment of derivatives, net — ( 240 ) ( 10,585 ) Gain on sale of non-marketable equity security — 23,924 — Interest expense ( 1,416 ) ( 1,490 ) ( 1,874 ) Interest and other income (expense), net 17,034 33,521 ( 84,767 ) Income (loss) before income taxes 200,043 187,160 ( 7,825 ) Provision for (benefit from) income taxes 20,222 ( 146,744 ) 6,485 Net income (loss) $ 179,821 $ 333,904 $ ( 14,310 ) Net income (loss) per share: Basic $ 1.67 $ 3.09 $ ( 0.13 ) Diluted $ 1.65 $ 3.01 $ ( 0.13 ) Weighted-average shares used in per share calculations: Basic 107,438 108,183 109,472 Diluted 109,041 110,889 109,472 Refer to Notes to Consolidated Financial Statements 57 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Years Ended December 31, (In thousands) 2024 2023 2022 Net income (loss) $ 179,821 $ 333,904 $ ( 14,310 ) Other comprehensive income (loss): Foreign currency translation adjustment ( 230 ) 282 ( 958 ) Unrealized gain (loss) on marketable securities, net of tax 239 3,412 ( 2,553 ) Total comprehensive income (loss) $ 179,830 $ 337,598 $ ( 17,821 ) Refer to Notes to Consolidated Financial Statements 58 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Gain (Loss) Common Stock (In thousands) Shares Amount Total Balances as of December 31, 2021 109,292 $ 109 $ 1,298,966 $ ( 435,227 ) $ ( 1,452 ) $ 862,396 Net loss — — — ( 14,310 ) — ( 14,310 ) Foreign currency translation adjustment — — — — ( 958 ) ( 958 ) Unrealized loss on marketable securities, net of tax — — — — ( 2,553 ) ( 2,553 ) Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 1,513 2 ( 12,279 ) — — ( 12,277 ) Repurchase and retirement of common stock under repurchase program ( 3,195 ) ( 3 ) ( 10,278 ) ( 90,140 ) — ( 100,421 ) Stock-based compensation — — 35,552 — — 35,552 Retirement of convertible senior note hedges — — 78,415 — — 78,415 Retirement of warrants — — ( 58,423 ) — — ( 58,423 ) Cumulative effect adjustment from adoption of ASU 2020-06 — — ( 34,545 ) 26,421 — ( 8,124 ) Balances as of December 31, 2022 107,610 108 1,297,408 ( 513,256 ) ( 4,963 ) 779,297 Net income — — — 333,904 — 333,904 Foreign currency translation adjustment — — — — 282 282 Unrealized gain on marketable securities, net of tax — — — — 3,412 3,412 Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 1,698 1 ( 29,379 ) — — ( 29,378 ) Repurchase and retirement of common stock under repurchase program ( 1,859 ) ( 1 ) ( 5,783 ) ( 94,742 ) — ( 100,526 ) Stock-based compensation — — 45,011 — — 45,011 Issuance of common stock in connection with the payments of year 1 and year 2 earn-out related to the PLDA Group acquisition 405 — 16,556 — — 16,556 Issuance of common stock in connection with the maturity of the convertible senior notes related to the settlement of the in-the-money conversion feature of the convertible senior notes 284 — — — — — Exercise of the convertible senior note hedges in connection with the conversion of convertible senior notes and retirement of the corresponding shares ( 284 ) — 11,440 ( 11,440 ) — — Retirement of warrants — — ( 10,457 ) — — ( 10,457 ) Balances as of December 31, 2023 107,854 108 1,324,796 ( 285,534 ) ( 1,269 ) 1,038,101 Net income — — — 179,821 — 179,821 Foreign currency translation adjustment — — — — ( 230 ) ( 230 ) Unrealized gain on marketable securities, net of tax — — — — 239 239 Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 1,023 1 ( 35,876 ) — — ( 35,875 ) Repurchase and retirement of common stock under repurchase program (includes excise tax) ( 2,211 ) ( 2 ) ( 65,750 ) ( 47,947 ) ( 113,699 ) Stock-based compensation — — 44,879 — — 44,879 Issuance of common stock in connection with the payment of year 3 earn-out related to the PLDA Group acquisition 177 — 7,456 — — 7,456 Balances as of December 31, 2024 106,843 $ 107 $ 1,275,505 $ ( 153,660 ) $ ( 1,260 ) $ 1,120,692 Refer to Notes to Consolidated Financial Statements 59 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, (In thousands) 2024 2023 2022 Cash flows from operating activities: Net income (loss) $ 179,821 $ 333,904 $ ( 14,310 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation 44,880 45,011 35,552 Depreciation 30,980 33,687 31,517 Amortization of intangible assets 11,710 14,741 15,610 Non-cash interest expense and amortization of convertible debt issuance costs — 3 207 Loss on extinguishment of debt — — 83,626 Loss on fair value adjustment of derivatives, net — 240 10,585 Deferred income taxes ( 9,875 ) ( 145,350 ) 689 Gain on divestiture — ( 90,784 ) — Gain on sale of non-marketable equity security — ( 23,924 ) — Impairment of assets 1,071 10,045 — Gain on sale of equity security — — ( 3,547 ) Change in fair value of earn-out liability ( 5,044 ) 9,234 3,111 Other 15 645 2,413 Change in operating assets and liabilities, net of effects of acquisition/disposition: Accounts receivable ( 39,835 ) ( 28,931 ) ( 9,274 ) Unbilled receivables 26,191 93,796 107,945 Prepaid expenses and other assets ( 5,500 ) 2,763 ( 89 ) Inventories ( 8,480 ) ( 15,254 ) ( 12,702 ) Income taxes receivable ( 21,179 ) ( 87,704 ) ( 618 ) Accounts payable 580 ( 5,768 ) 11,975 Accrued salaries and benefits and other liabilities 571 41 ( 4,745 ) Income taxes payable 26,275 59,643 ( 19,279 ) Deferred revenue 3,774 ( 5,048 ) ( 1,354 ) Operating lease liabilities ( 5,356 ) ( 5,204 ) ( 6,919 ) Net cash provided by operating activities 230,599 195,786 230,393 Cash flows from investing activities: Purchases of property and equipment ( 30,697 ) ( 23,240 ) ( 17,478 ) Acquisition of intangible assets — — ( 3,000 ) Purchases of marketable securities ( 415,374 ) ( 434,155 ) ( 150,949 ) Maturities of marketable securities 280,829 175,854 59,642 Proceeds from sale of marketable securities 85,722 117,798 276,687 Proceeds from sale of non-marketable equity security 22,796 — — Proceeds from divestiture — 106,347 — Proceeds from sale of equity security — — 3,009 Acquisition of businesses, net of cash acquired — — ( 15,932 ) Net cash provided by (used in) investing activities ( 56,724 ) ( 57,396 ) 151,979 Cash flows from financing activities: Proceeds received from issuance of common stock under employee stock plans 5,465 8,950 6,136 Payments of taxes on restricted stock units ( 41,340 ) ( 38,328 ) ( 18,413 ) Payments under installment payment arrangements ( 16,350 ) ( 16,192 ) ( 14,378 ) Payments for settlement and repurchase of convertible senior notes — ( 10,381 ) ( 258,060 ) Proceeds from retirement of convertible senior note hedges — — 91,729 Payments for settlement of warrants — ( 10,697 ) ( 69,528 ) Payment of deferred purchase consideration from acquisition ( 2,450 ) ( 2,450 ) — Repurchase and retirement of common stock, including prepayment under accelerated share repurchase program ( 113,312 ) ( 100,525 ) ( 100,421 ) Net cash used in financing activities ( 167,987 ) ( 169,623 ) ( 362,935 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 880 ) 306 ( 2,007 ) Net increase (decrease) in cash, cash equivalents and restricted cash 5,008 ( 30,927 ) 17,430 Cash, cash equivalents and restricted cash at beginning of year 94,767 125,694 108,264 Cash, cash equivalents and restricted cash at end of year $ 99,775 $ 94,767 $ 125,694 Years Ended December 31, (In thousands) 2024 2023 2022 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ — $ 73 $ 1,525 Income taxes, net of refunds $ 27,132 $ 25,932 $ 25,275 Non-cash investing and financing activities: Property and equipment received and accrued in accounts payable and other liabilities $ 3,935 $ 21,768 $ 39,035 Issuance of common stock in connection with the payments of earn-out related to the PLDA Group acquisition $ 7,456 $ 16,556 $ — Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 4,799 $ 1,690 $ 5,931 As of December 31, (In thousands) 2024 2023 2022 Reconciliation of the cash, cash equivalents and restricted cash balances as shown in the consolidated statement of cash flows: Cash and cash equivalents $ 99,775 $ 94,767 $ 125,334 Restricted cash — — 360 Cash, cash equivalents and restricted cash $ 99,775 $ 94,767 $ 125,694 Refer to Notes to Consolidated Financial Statements 60 Table of Contents RAMBUS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Formation and Business of the Company Rambus Inc. (“Rambus” or the “Company”) was incorporated in California in March 1990 and reincorporated in Delaware in March 1997. Rambus is a global semiconductor company dedicated to enabling the future of the data center and artificial intelligence (“AI”) by delivering innovative memory and security solutions that address the evolving needs of the technology industry. As a pioneer with nearly 35 years of advanced semiconductor design experience, the Company is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of accelerating and securing data movement in the data center, edge, and client markets. The Company is a leader in high-performance memory subsystems, offering a balanced and diverse portfolio of products encompassing chips and silicon intellectual property (“IP”). Focusing primarily on the data center, the Company’s innovative solutions maximize performance and security in computationally intensive systems. The Company provides industry-leading memory interface chips that enable the highest bandwidth and capacity server memory modules, maximizing memory performance for the most demanding data-intensive workloads. These solutions are essential for supporting the training and inference of increasingly complex AI models, including those used in generative AI applications. The Company generates revenue by selling its semiconductor chips and licensing its IP products and inventions to market-leading companies. 2. Summary of Significant Accounting Policies Financial Statement Presentation The accompanying consolidated financial statements include the accounts of Rambus and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated on the accompanying consolidated financial statements. Rambus accounts for investments in entities where it owns more than 20% and has significant influence (but not control) over the investee's operations using the equity method. These investments are classified under other assets. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Reclassifications Certain prior-year balances were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported net income or cash flows for any of the periods presented. Revenue Recognition The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services. Goods and services that are distinct are accounted for as separate performance obligations. Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price basis. The Company has established standalone selling prices for the majority of its distinct offerings - specifically, the same pricing methodology is consistently applied to all licensing arrangements; all service offerings are priced within tightly controlled bands and all contracts that include support and maintenance state a renewal rate or price that is systematically enforced. For certain contracts, the Company utilizes the residual approach to estimate standalone selling prices primarily for service offerings sold to customers at highly variable pricing. The Company’s revenue consists of product, royalty and contract and other revenue. Products primarily consist of memory interface chips sold directly and indirectly to module manufacturers and OEMs worldwide through multiple channels, including 61 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) its direct sales force and distributors. Royalty revenue consists of patent and technology license royalties. Contract and other revenue consists of software license fees, engineering fees associated with integration of the Company’s technology solutions into its customers’ products and support and maintenance fees. Product Revenue Product revenue is recognized upon shipment of product to customers, net of accruals for estimated sales returns and allowances, and to distributors, net of accruals for price protection and rights of return on products unsold by the distributors. The Company transacts with direct customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date. Royalty Revenue Rambus’ patent and technology licensing arrangements generally range between one year and ten years in duration and generally grant the licensee the right to use applicable portions of the Company’s entire IP portfolio as it evolves over time. These arrangements do not typically grant the licensee the right to terminate for convenience and where such rights exist, termination is prospective, with no refund of fees already paid or cancellation of fees already incurred by the licensee. Patent and technology licensing arrangements result in fixed payments received over time, with guaranteed minimum payments on occasion, variable payments calculated based on the licensee’s sale or use of the IP, or a mix of fixed and variable payments. • For fixed-fee arrangements (including arrangements that include minimum guaranteed amounts), the Company recognizes revenue upon control over the underlying IP use right transferring to the licensee, net of the effect of significant financing components calculated using customer-specific, risk-adjusted lending rates typically ranging between 5 % and 10 %, with the related interest income recognized over time on an effective rate basis. Where a licensee has the contractual right to terminate a fixed-fee arrangement for convenience without any substantive penalty payable upon such termination, the Company recognizes revenue for the duration of the contract in which the parties have present enforceable rights and obligations. • For variable arrangements, the Company recognizes revenue based on an estimate of the licensee’s sale or usage of the IP during the periods the sale or usage occur, typically quarterly, with a true-up recorded, if required, when the Company receives the actual royalty report from the licensee. • The Company recognizes license renewal revenue commencing with the start of the renewal period. Contract and Other Revenue Contract and other revenue consists of software license fees and engineering fees associated with integration of the Company’s technology solutions into its customers’ products, and support and maintenance. An initial software arrangement may consist of a term-based or perpetual license, significant software customization services and support and maintenance services that include post-implementation customer support and the right to unspecified software updates and enhancements on a when and if available basis. The Company recognizes license and customization services revenue at a point in time when final delivery is made or based on an over time model, depending on the nature and amount of customization. For the over time model, the Company recognizes revenue over time by measuring the progress toward complete satisfaction of that performance obligation. The Company recognizes support and maintenance revenue over the time those services are provided. Significant Judgments The Company applies significant judgment when determining the amount and timing of revenue from the Company’s contracts with customers, based on its estimate of the man-months necessary for completing development and customization services. The Company has adequate tools and controls in place, and substantial experience and expertise in timely and 62 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) accurately tracking man-months incurred in completing customization and other professional services, and quantifying significant changes in estimates. The Company recognizes revenue on variable fee licensing arrangements on the basis of estimated sales and usage, which the Company then trues up to actual results when it receives the final related reports from its customers. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers. The Company records contract assets when revenue is recognized prior to invoicing, and a contract liability when revenue is recognized subsequent to invoicing. The contract assets are transferred to receivables when the billing occurs. Cost of Revenue Cost of revenue includes cost of professional services, materials, including cost of wafers processed by third-party foundries, costs associated with packaging and assembly, test and shipping, cost of personnel, including stock-based compensation, and equipment associated with manufacturing support, logistics and quality assurance, warranty costs, amortization of existing technology, write-down of inventories, amortization of production mask costs, overhead and an allocated portion of occupancy costs. Leases The Company leases office space, domestically and internationally, under operating leases. The Company’s leases have remaining lease terms generally between one year and eight years . Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities and long-term operating lease liabilities in the Company’s Consolidated Balance Sheets. The Company does not have any finance leases. The Company determines if an arrangement is a lease, or contains a lease, at inception. The Company assesses all relevant facts and circumstances in making the determination of the existence of a lease. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments, and uses the implicit rate when readily determinable. Many of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the Company does not separate non-lease components from lease components. Operating lease costs are included in research and development and selling, general and administrative costs in the Company’s Consolidated Statements of Operations. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill is not subject to amortization, but is subject to at least an annual assessment for impairment. The Company performs its impairment analysis of goodwill on an annual basis during the fourth quarter of the year unless conditions arise that warrant a more frequent evaluation. When goodwill is assessed for impairment, the Company has the option to perform an assessment of qualitative factors of impairment (optional assessment) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given year, qualitative factors to consider for a reporting unit include: cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations; macroeconomic conditions; and other relevant events and factors affecting the reporting unit. If the Company determines in the qualitative assessment that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For a reporting unit tested using a quantitative approach, the Company compares the fair value of the reporting unit with the carrying amount of the reporting unit, including goodwill. The fair value of the reporting unit is estimated using an income approach. Under the income approach, the Company measures fair value of the reporting unit based on a projected cash flow method using a discount rate determined by its management which is commensurate with the risk inherent in its current business model. The Company’s discounted cash flow projections are based on annual financial forecasts developed internally by management for use in managing its business. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, then the amount of goodwill impairment will be the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. 63 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company performed its annual goodwill impairment analysis as of December 31, 2024 and determined that there was no impairment of its goodwill. For the years ended December 31, 2023 and 2022, the Company did not recognize any goodwill impairment charges. Intangible Assets Intangible assets are comprised of existing technology, customer contracts and contractual relationships, and other definite-lived and indefinite-lived intangible assets. Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. Identifiable definite-lived intangible assets are amortized over the period of estimated benefit using the straight-line method, with estimated useful lives ranging from six months to ten years. Acquired indefinite-lived intangible assets related to the Company’s in-process research and development (“IPR&D”) are capitalized and subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the Company makes a separate determination of the useful life of the acquired indefinite-lived intangible assets and the related amortization is recorded as an expense over the estimated useful life of the specific projects. Indefinite-lived intangible assets are subject to at least an annual assessment for impairment, applying a fair-value based test. The Company first performs a qualitative assessment to determine whether it is more likely than not (more than 50% likelihood) that the indefinite-lived intangible assets are impaired. If after assessing the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, the Company determines that it is more likely than not that the indefinite-lived intangible assets are impaired, then the Company performs a quantitative impairment test by comparing the fair value of the intangible assets with its carrying amount. The Company measures fair value of the indefinite-lived intangible assets under the income approach based on a projected cash flow method using a discount rate determined by its management which is commensurate with the risk inherent in its current business model. The Company’s discounted cash flow projections are based on its annual financial forecasts developed internally by management for use in managing its business. If the fair value of the indefinite-lived intangible assets exceeds its carrying value, the indefinite-lived intangible assets are not impaired and no further testing is required. If the implied fair value of the indefinite-lived intangible assets is less than the carrying value, the difference is recorded as an impairment loss. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Inventories are reduced for write-downs based on periodic reviews for evidence of excess or obsolete parts. The write-down is based on comparison between inventory on hand and estimated future sales for each specific product. Once written down, inventory write-downs are not reversed until the inventory is sold or scrapped. Inventory write-downs are also established when conditions indicate that the net realizable value is less than cost due to physical deterioration, obsolescence, changes in price level or other causes. Property and Equipment Property and equipment include computer software, computer equipment, leasehold improvements, machinery, and furniture and fixtures. Computer software, computer equipment, machinery, and furniture and fixtures are stated at cost and generally depreciated on a straight-line basis over an estimated useful life of three to seven years . Refer to Note 11, “Balance Sheet Details,” for additional information. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining terms of the leases. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the related gain or loss is included in the results from operations. Definite-Lived Asset Impairment The Company evaluates definite-lived assets (including property and equipment and intangible assets) for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. The carrying value is not recoverable if it exceeds the undiscounted cash flows resulting from the use of the asset group and its eventual disposition. The Company’s estimates of future cash flows attributable to its asset groups require significant judgment based on its historical and anticipated results and are subject to many factors. Factors that the Company considers important which could trigger an impairment review include significant negative industry or economic trends, significant loss of clients and significant changes in the manner of its use of the acquired assets or the strategy for its overall business. When the Company determines that the carrying value of an asset group may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company measures the potential impairment based on a projected 64 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) discounted cash flow method using a discount rate determined by the Company to be commensurate with the risk inherent in the Company’s current business model. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. The impairment charge is recorded to reduce the pre-impairment carrying amount of the assets based on the relative carrying amount of those assets, though not to reduce the carrying amount of an asset below its fair value. Different assumptions and judgments could materially affect the calculation of the fair value of the assets. During 2024, 2023 and 2022, the Company did not recognize any impairment of its definite-lived and indefinite-lived assets, except as described in Note 20, “Divestiture.” Income Taxes Income taxes are accounted for using an asset and liability approach, which requires the recognition of deferred tax assets and liabilities for expected future tax events that have been recognized differently in the Company’s consolidated financial statements and tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of the enacted tax law and the effects of future changes in tax laws or rates are not anticipated. A valuation allowance is established when necessary to reduce deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. As a result, the Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. The company recognizes the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position. Stock-Based Compensation and Equity Incentive Plans The Company maintains stock plans covering a broad range of equity grants including stock options, nonvested equity stock and equity stock units and performance-based instruments. In addition, the Company sponsors an Employee Stock Purchase Plan (“ESPP”), whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15 % discount from the fair market value of the common stock as of specific dates. The Company determines compensation expense associated with restricted stock units based on the fair value of its common stock on the date of grant. Cash and Cash Equivalents Cash equivalents are investments with original maturity of three months or less at the date of purchase. The Company maintains its cash balances with high-quality financial institutions. Cash equivalents are invested in highly rated, liquid money market securities, time deposits and certain U.S. government sponsored obligations. Marketable Securities Rambus invests its excess cash and cash equivalents primarily in U.S. government-sponsored obligations, corporate bonds, commercial paper and notes, time deposits and money market funds that mature within three years . Available-for-sale securities are carried at fair value, based on quoted market prices, with the unrealized gains or losses reported, net of tax, in stockholders’ equity as part of accumulated other comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, both of which are included in interest and other income, net. Realized gains and losses are recorded based on the specific identification method and are included in interest and other income, net. The Company reviews its investments in marketable securities for possible other than temporary impairments on a regular basis. If any loss on investment is believed to be a credit loss, a charge will be recognized in operations. In evaluating whether a credit loss on a debt security has occurred, the Company considers the following factors: 1) the Company’s intent to sell the security, 2) if the Company intends to hold the security, whether or not it is more likely than not that the Company will be required to sell the security before recovery of the security’s amortized cost basis and 3) even if the Company intends to hold the security, whether or not the Company expects the security to recover the entire amortized cost basis. Due to the high credit quality and short-term nature of the Company’s investments, there have been no material credit losses recorded to date. The classification of funds between short-term and long-term is based on whether the securities are available for use in operations or other purposes. Fair Value of Financial Instruments The fair value measurement statement defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, and requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires that fair value measurement be classified and disclosed in one of the following three categories: 65 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company uses unadjusted quotes to determine fair value. The financial assets in Level 1 include money market funds. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. The Company uses observable pricing inputs including benchmark yields, reported trades and broker/dealer quotes. The financial assets in Level 2 include U.S. government bonds and notes, and corporate bonds, commercial paper and notes. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable ( i.e. , supported by little or no market activity). When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and the Company considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of non-performance. The Company does not have any financial assets or liabilities in Level 3 as of December 31, 2024 and 2023, except for the Company’s liability for the earn-out consideration related to the PLDA acquisition as of December 31, 2023, which was recorded within other long-term liabilities. The Company had classified this liability within Level 3 of the fair value hierarchy because the fair value was determined using significant unobservable inputs. Refer to Note 9, “Fair Value of Financial Instruments,” for additional information. The carrying value of cash equivalents, accounts receivable and accounts payable approximate their fair values due to their relatively short maturities as of December 31, 2024 and 2023. The Company’s financial instruments are measured and recorded at fair value, except for equity method investments and convertible notes. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity, net of tax. Fair value of the marketable securities is determined based on quoted market prices. The fair value of the Company’s convertible notes fluctuated with interest rates and with the market price of the common stock, but did not affect the carrying value of the debt on the balance sheet. The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. The Company’s equity method investments were initially recognized at cost, and the carrying amount was increased or decreased to recognize the Company’s share of the profit or loss of the investee after the date of acquisition. The Company’s share of the investee’s profit or loss was recognized in interest and other income (expense), net in the Company’s Consolidated Statements of Operations. Distributions received from an investee reduced the carrying amount of the investment. Research and Development Costs incurred in research and development, which include engineering expenses, such as salaries and related benefits, stock-based compensation, depreciation, professional services and overhead expenses related to the general development of the Company’s products, are expensed as incurred. Computation of Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted-average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, and restricted stock and restricted stock units, and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method, or the if-converted method for the in-the-money conversion benefit feature of the 2023 Notes. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potentially dilutive common shares are included in the computation of diluted earnings per share amount when a net loss is reported. 66 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments and unrealized gains and losses on marketable securities. Other comprehensive income (loss), net of tax, is presented in the Consolidated Statements of Comprehensive Income (Loss). Credit Concentration As of December 31, 2024 and 2023, the Company’s cash, cash equivalents and marketable securities were invested with various financial institutions in the form of corporate bonds, commercial paper and notes, money market funds, time deposits, U.S. Treasuries and U.S. Government Agencies. The Company’s exposure to market risk for changes in interest rates relates primarily to its investment portfolio. The Company places its investments with high-credit issuers and, by investment policy, attempts to limit the amount of credit exposure to any one issuer. As stated in the Company’s investment policy, it will ensure the safety and preservation of the Company’s invested funds by limiting default risk and market risk. The Company has certain investments denominated in foreign currencies and therefore is subject to foreign exchange risk from these assets. The Company holds cash, cash equivalents and marketable securities in excess of federally insured limits. The Company mitigates default risk by investing in high credit quality securities and by positioning its portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to enable portfolio liquidity. The Company’s accounts receivable are derived from revenue earned from customers located in the U.S. and internationally. Refer to Note 7, “Segments and Major Customers,” for additional information. The Company’s unbilled receivables are collected from customers located in the U.S. and internationally. Refer to Note 4, “Revenue Recognition,” for additional information. Foreign Currency Translation and Re-Measurement The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive gain (loss) in the Company’s Consolidated Statements of Stockholders’ Equity. The Company’s subsidiaries that use the U.S. dollar as their functional currency re-measure monetary assets and liabilities at exchange rates in effect at the end of each period, and inventories, property and non-monetary assets and liabilities at historical rates. Additionally, foreign currency transaction gains and losses are included in interest income and other (income) expense, net, in the Company’s Consolidated Statements of Operations and were not material in the periods presented. Business Combinations The Company accounts for acquisitions of businesses using the purchase method of accounting, which requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date including the Company’s estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies where applicable. 67 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) (“ASU 2020-06”).” The amendments in this ASU simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, the guidance removes the liability and equity separation models for convertible instruments. Instead, entities will account for convertible debt instruments wholly as debt unless convertible instruments contain features that require bifurcation as a derivative or that result in substantial premiums accounted for as paid-in capital. The guidance also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. Upon adoption, the Company reversed approximately $ 35.2 million of debt discount related to the Company’s 1.375 % Convertible Senior Notes due 2023 (the “2023 Notes”) from additional paid-in capital, reversed approximately $ 8.3 million representing the unamortized debt discount from liabilities, and recorded the net impact of $ 26.9 million to accumulated deficit. The Company also removed approximately $ 0.7 million of debt issuance costs related to the 2023 Notes from additional paid-in capital and recorded approximately $ 0.5 million to accumulated deficit related to the amortization of debt issuance costs that were historically allocated to equity. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This guidance requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker. In addition, this ASU requires that all existing annual disclosures about segment profit or loss must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety. This ASU is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods within annual reporting periods beginning after December 15, 2024. The Company adopted this guidance for the year ended December 31, 2024 on a retrospective basis. Refer to Note 7, “Segments and Major Customers,” for additional information. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires additional disclosures related to rate reconciliation, income taxes paid and other disclosures. For each annual period presented, public business entities are required to 1) disclose specific categories in the rate reconciliation and 2) provide additional information for reconciling items that meet a quantitative threshold. In addition, this ASU requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as the amount of income taxes paid disaggregated by individual jurisdictions which meet a quantitative threshold. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this ASU should be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”).” This guidance requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement expense caption, as applicable. The ASU also requires a qualitative description of the amounts remaining in expense captions that are not separately disaggregated quantitatively, as well as disclosure of the total amount of selling expenses and, in annual reporting periods, the entity’s definition of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments.” This guidance clarifies the requirements for determining 68 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The ASU also clarifies that the induced conversion guidance applies to a convertible debt instrument that is not currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. This ASU is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments of ASU 2020-06. The amendments in this ASU may be applied either on a prospective or retrospective basis. The Company currently expects no impact from this ASU on its consolidated financial statements and related disclosures. 4. Revenue Recognition Contract Balances The contract assets are primarily related to the Company’s fixed fee IP licensing arrangements and rights to consideration for performance obligations delivered but not billed as of December 31, 2024. The Company’s contract balances were as follows: As of December 31, (In thousands) 2024 2023 Unbilled receivables $ 29,104 $ 55,295 Deferred revenue 21,852 18,085 During the years ended December 31, 2024 and December 31, 2023, the Company recognized $ 17.5 million and $ 20.8 million, respectively, of revenue that was included in deferred revenue as of December 31, 2023 and December 31, 2022, respectively. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately $ 25.7 million as of December 31, 2024, which the Company primarily expects to recognize over the next 2 years. 5. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share: For the Years Ended December 31, (In thousands, except per share amounts) 2024 2023 2022 Net income (loss) per share: Numerator: Net income (loss) $ 179,821 $ 333,904 $ ( 14,310 ) Denominator: Weighted-average common shares outstanding - basic 107,438 108,183 109,472 Effect of potentially dilutive common shares 1,603 2,706 — Weighted-average common shares outstanding - diluted 109,041 110,889 109,472 Basic net income (loss) per share $ 1.67 $ 3.09 $ ( 0.13 ) Diluted net income (loss) per share $ 1.65 $ 3.01 $ ( 0.13 ) 69 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to the Company’s common stockholders for the year ended December 31, 2022 because the impact of including them would have been anti-dilutive (in thousands): For the Year Ended December 31, (In thousands) 2022 Stock options 282 Restricted stock units 2,361 Potentially issuable shares related to the in-the-money conversion benefit feature of convertible notes 175 Total 2,818 The shares in the tables above did not include the principal amount of the Company’s 2023 Notes (“the 2023 Notes”) as the principal amount of the 2023 Notes had to be paid in cash. The Company settled the conversion of the remaining $ 10.4 million aggregate principal amount of the 2023 Notes in the first quarter of 2023. Accordingly, the Company delivered approximately 0.3 million shares of the Company's common stock as settlement related to the in-the-money conversion feature of the 2023 Notes and received an equal amount of shares due to the settlement of the convertible senior note hedges. The Company included dilutive instruments exercised during the period in the denominator of diluted earnings (loss) per share for the period prior to exercise, and thereafter, the Company included the actual shares issued in the denominator for both basic and diluted earnings (loss) per share . Refer to Note 12, “Convertible Notes,” for additional information. As a result of the Company’s adoption of ASU No. 2020-06 on January 1, 2022, the dilutive impact of the 2023 Notes on the calculation of diluted net income (loss) per share was considered using the if-converted method. Furthermore, because the principal amount of the 2023 Notes had to be settled in cash, the dilutive impact of applying the if-converted method was limited to the in-the-money portion, if any, of the 2023 Notes. 6. Intangible Assets and Goodwill Goodwill The following tables present goodwill information for the years ended December 31, 2024 and December 31, 2023: (In thousands) December 31, 2023 Adjustment to Goodwill December 31, 2024 Total goodwill $ 286,812 — $ 286,812 (In thousands) December 31, 2022 Divestiture of Goodwill (1) December 31, 2023 Total goodwill $ 292,040 $ ( 5,228 ) $ 286,812 ______________________________________ (1) In September 2023, the Company divested its PHY IP group, which resulted in the Company recognizing a decrease in goodwill based on the relative fair value of the Company’s single reporting unit in proportion to the fair value of the divested PHY IP group. Refer to Note 20, “Divestiture,” for additional information. 70 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Intangible Assets, Net The components of the Company’s intangible assets as of December 31, 2024 and December 31, 2023 were as follows: As of December 31, 2024 (In thousands, except useful life) Useful Life Gross Carrying Amount (1) Accumulated Amortization (1) Net Carrying Amount Existing technology 3 to 10 years $ 288,001 $ ( 270,954 ) $ 17,047 Customer contracts and contractual relationships 0.5 to 10 years 37,496 ( 37,484 ) 12 Non-compete agreements and trademarks 3 years 300 ( 300 ) — Total intangible assets $ 325,797 $ ( 308,738 ) $ 17,059 ______________________________________ (1) The IPR&D projects acquired in connection with the acquisition of PLDA in 2021 were completed during the fourth quarter of 2024. The related intangible assets of $ 7.4 million were reclassified as existing technology and are being amortized over their expected useful life of five years . During the year ended December 31, 2024, the amortization for the reclassified assets was not material. As of December 31, 2023 (In thousands, except useful life) Useful Life Gross Carrying Amount (1) Accumulated Amortization (1) Net Carrying Amount Existing technology 3 to 10 years $ 286,712 $ ( 265,756 ) $ 20,956 Customer contracts and contractual relationships 0.5 to 10 years 37,496 ( 37,083 ) 413 Non-compete agreements and trademarks 3 years 300 ( 300 ) — IPR&D Not applicable 7,400 — 7,400 Total intangible assets $ 331,908 $ ( 303,139 ) $ 28,769 ______________________________________ (1) In September 2023, the Company disposed of approximately $ 7.4 million of net intangible assets (including $ 3.8 million of IPR&D) in connection with the divestiture of the Company’s PHY IP group. Refer to Note 20, “Divestiture,” for additional information. Amortization expense for intangible assets for the years ended December 31, 2024, 2023 and 2022 was $ 11.7 million, $ 14.7 million and $ 15.6 million, respectively. The estimated future amortization expense of intangible assets as of December 31, 2024 was as follows (in thousands): Years Ending December 31: Amount 2025 $ 7,226 2026 5,191 2027 1,929 2028 1,480 2029 1,233 Total intangible assets $ 17,059 7. Segments and Major Customers Operating segments are based upon the Company’s internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker (“CODM”) to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment. The Company has determined its CODM to be the Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating decisions and assessing financial performance. On this basis, the Company is organized and operates as a single segment within the semiconductor space. As of December 31, 2024, the Company has a single operating and reportable segment. 71 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The CODM uses net income to assess segment performance, allocate resources and manage the business on a consolidated basis. The significant expenses for the segment exclude certain non-cash adjustments and non-recurring items, and are used to monitor budget versus actual results and to analyze the period-over-period comparisons. The significant expenses that are regularly provided to the CODM and reconciliations to the consolidated net income for the years ended December 31, 2024, 2023 and 2022, respectively, were as follows: For the Years Ended December 31, (In thousands) 2024 2023 2022 Total revenue $ 556,624 $ 461,117 $ 454,793 Adjusted cost of revenue (1) ( 98,368 ) ( 89,322 ) ( 93,101 ) Adjusted research and development (2) ( 146,431 ) ( 140,793 ) ( 142,853 ) Adjusted sales, general and administrative (3) ( 76,038 ) ( 76,669 ) ( 78,335 ) Other segment items: Stock-based compensation expenses (4) ( 44,879 ) ( 45,011 ) ( 35,552 ) Amortization of acquired intangible assets (4) ( 11,710 ) ( 14,741 ) ( 15,610 ) Impairment of assets ( 1,071 ) ( 10,045 ) — Acquisition & divestiture-related costs (5) ( 162 ) ( 1,625 ) ( 7,179 ) Interest and other income (expense), net 17,034 33,521 ( 84,767 ) Change in fair value of earn-out liability 5,044 ( 9,234 ) ( 3,111 ) Restructuring charges — ( 9,368 ) — Gain on divestiture — 90,784 — Other (6) — ( 1,454 ) ( 2,110 ) Provision for (benefit from) income taxes ( 20,222 ) 146,744 ( 6,485 ) Net income (loss) $ 179,821 $ 333,904 $ ( 14,310 ) _________________________________________ (1) Excludes stock-based compensation expenses and amortization of acquisition-related intangible assets. (2) Excludes stock-based compensation expenses and retention bonus expense related to acquisitions. (3) Excludes stock-based compensation expenses and acquisition/divestiture-related costs and retention bonus expense. (4) The Company excludes these expenses from its adjusted cost of revenue and operating expenses primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. (5) The Company excludes these expenses in order to provide better comparability between periods as they are related to acquisitions and divestitures and have no direct correlation to the Company’s ongoing operating results. (6) Includes gain on sale of equity security, expense on abandoned operating leases, facility restoration costs and certain other one-time adjustments. The Company excludes these items as they are not reflective of ongoing results. The following represents the Company’s significant expenses related to research and development expenses and sales, general and administrative expenses, as shown above, for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, (In thousands) 2024 2023 2022 Payroll and benefits $ 129,228 $ 123,056 $ 124,130 Variable research and development expenses (1) 27,342 28,228 29,482 Professional fees 20,055 22,148 21,524 Temporary labor services and consulting expenses 14,264 13,577 17,276 Facilities costs 11,853 12,347 11,205 Amortization and depreciation 10,076 10,144 9,265 Other expenses 9,651 7,962 8,306 Total adjusted operating expenses $ 222,469 $ 217,462 $ 221,188 _________________________________________ (1) Includes primarily software tools, software licenses and prototyping costs. 72 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The measure of segment assets is reported on the Company’s Consolidated Balance Sheets as total consolidated assets. Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable as of December 31, 2024 and 2023, respectively, was as follows: As of December 31, Customer 2024 2023 Customer 1 39 % 49 % Customer 2 17 % 13 % Customer 3 * 12 % _________________________________________ * Customer accounted for less than 10% of total accounts receivable in the period. Revenue from the Company’s major customers representing 10% or more of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively, was as follows: Years Ended December 31, Customer 2024 2023 2022 Customer A 23 % 27 % * Customer B 17 % 18 % 19 % Customer C 12 % * 17 % Customer D * * 14 % _________________________________________ * Customer accounted for less than 10% of total revenue in the period. Revenue from customers in the geographic regions based on the location of contracting parties was as follows: Years Ended December 31, (In thousands) 2024 2023 2022 United States $ 201,466 $ 176,821 $ 277,776 South Korea 197,515 152,328 7,222 Singapore 67,318 53,327 57,309 Other 90,325 78,641 112,486 Total $ 556,624 $ 461,117 $ 454,793 As of December 31, 2024, of the $ 75.5 million of total property and equipment, approximately $ 70.4 million was located in the United States, $ 2.6 million was located in India and $ 2.5 million was located in other foreign locations. As of December 31, 2023, of the $ 67.8 million of total property and equipment, approximately $ 64.1 million was located in the United States, $ 3.0 million was located in India and $ 0.7 million was located in other foreign locations. 73 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. Marketable Securities All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows: As of December 31, 2024 (In thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Cash $ 87,415 $ 87,415 $ — $ — Cash equivalents: Money market funds 6,025 6,025 — — Corporate notes, bonds and commercial paper 6,335 6,334 1 — Total cash equivalents 12,360 12,359 1 — Total cash and cash equivalents 99,775 99,774 1 — Marketable securities: Time deposits 12,870 12,870 — — U.S. Government bonds and notes 220,056 220,034 184 ( 162 ) Corporate bonds, commercial paper and notes 149,097 149,085 121 ( 109 ) Total marketable securities 382,023 381,989 305 ( 271 ) Total cash, cash equivalents and marketable securities $ 481,798 $ 481,763 $ 306 $ ( 271 ) As of December 31, 2023 (In thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Cash $ 88,486 $ 88,486 $ — $ — Cash equivalents: Money market funds 3,790 3,790 — — U.S. Government bonds and notes 2,491 2,491 — — Total cash equivalents 6,281 6,281 — — Total cash and cash equivalents 94,767 94,767 — — Marketable securities: U.S. Government bonds and notes 194,428 194,389 251 ( 212 ) Corporate bonds, commercial paper and notes 136,649 136,892 162 ( 405 ) Total marketable securities 331,077 331,281 413 ( 617 ) Total cash, cash equivalents and marketable securities $ 425,844 $ 426,048 $ 413 $ ( 617 ) Available-for-sale securities are reported at fair value on the balance sheets and were classified along with cash as follows: As of December 31, (In thousands) 2024 2023 Cash $ 87,415 $ 88,486 Cash equivalents 12,360 6,281 Total cash and cash equivalents 99,775 94,767 Marketable securities 382,023 331,077 Total cash, cash equivalents and marketable securities $ 481,798 $ 425,844 The Company continues to invest in highly rated, liquid debt securities. The Company holds all of its marketable securities as available-for-sale, marks them to market and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation and impairment. 74 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The estimated fair value and gross unrealized losses of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position as of December 31, 2024 and 2023 are as follows: Fair Value Gross Unrealized Losses (In thousands) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Less than 12 months U.S. Government bonds and notes $ 83,162 $ 32,454 $ ( 162 ) $ ( 53 ) Corporate bonds, commercial paper and notes 48,360 46,407 ( 109 ) ( 40 ) Total cash equivalents and marketable securities in a continuous unrealized loss position for less than 12 months 131,522 78,861 ( 271 ) ( 93 ) 12 months or greater U.S. Government bonds and notes — 6,841 — ( 159 ) Corporate bonds, commercial paper and notes — 16,619 — ( 365 ) Total marketable securities in a continuous unrealized loss position for 12 months or greater — 23,460 — ( 524 ) Total cash equivalents and marketable securities in a continuous unrealized loss position $ 131,522 $ 102,321 $ ( 271 ) $ ( 617 ) The gross unrealized losses as of December 31, 2024 and 2023 were not material in relation to the Company’s total available-for-sale portfolio. The gross unrealized losses can be primarily attributed to a combination of market conditions as well as the demand for and duration of the U.S. government-sponsored obligations and corporate bonds, commercial paper and notes. The Company reasonably believes that there is no need to sell these investments and that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. Therefore, these unrealized losses were recorded in other comprehensive income (loss). The Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results. The contractual maturities of cash equivalents (excluding money market funds which have no maturity) and marketable securities are summarized as follows: (In thousands) December 31, 2024 Due less than one year $ 294,611 Due from one year through three years 93,747 Total $ 388,358 Refer to Note 9, “Fair Value of Financial Instruments,” for a discussion regarding the fair value of the Company’s cash equivalents and marketable securities. 75 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. Fair Value of Financial Instruments The following table presents the financial instruments and liabilities that are carried at fair value and summarizes their valuation by the respective pricing levels detailed in Note 2, “Summary of Significant Accounting Policies,” as of December 31, 2024 and 2023: As of December 31, 2024 (In thousands) Total Quoted Market Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets carried at fair value Money market funds $ 6,025 $ 6,025 $ — $ — Time deposits 12,870 — 12,870 — U.S. Government bonds and notes 220,056 — 220,056 — Corporate bonds, commercial paper and notes 155,432 — 155,432 — Total assets carried at fair value $ 394,383 $ 6,025 $ 388,358 $ — As of December 31, 2023 (In thousands) Total Quoted Market Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets carried at fair value Money market funds $ 3,790 $ 3,790 $ — $ — U.S. Government bonds and notes 196,919 — 196,919 — Corporate bonds, commercial paper and notes 136,649 — 136,649 — Total assets carried at fair value $ 337,358 $ 3,790 $ 333,568 $ — Liabilities carried at fair value Earn-out consideration related to PLDA acquisition $ 12,500 $ — $ — $ 12,500 Total liabilities carried at fair value $ 12,500 $ — $ — $ 12,500 The Company’s liabilities related to earn-out consideration are classified within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs. The following table presents additional information about liabilities measured at fair value for which the Company utilizes Level 3 inputs to determine fair value, as of December 31, 2024 and 2023: Years Ended December 31, (In thousands) 2024 2023 2022 Balance as of beginning of period $ 12,500 $ 14,800 $ 16,900 Change in fair value of earn-out liability due to remeasurement ( 5,044 ) 9,234 3,111 Change in fair value of earn-out liability due to achievement of revenue target ( 7,456 ) ( 11,534 ) ( 5,211 ) Balance as of end of period $ — $ 12,500 $ 14,800 76 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the years ended December 31, 2024, 2023 and 2022, the changes in the fair value of the earn-out liability related to the 2021 acquisition of PLDA, which was subject to certain revenue targets of the acquired business for a period of three years from the date of acquisition, and which was settled annually in shares of the Company’s common stock based on the fair value of that common stock fixed at the time the Company acquired PLDA. The fair value of the earn-out liability was remeasured each quarter, depending on the acquired business’s revenue performance relative to target over the applicable period, and adjusted to reflect changes in the per share value of the Company’s common stock. The Company classified its liability for the contingent earn-out liability related to the PLDA acquisition within Level 3 of the fair value hierarchy because the fair value calculation included significant unobservable inputs, such as revenue forecast, revenue volatility, equity volatility and weighted average cost of capital. During the years ended December 31, 2024, 2023 and 2022, the Company remeasured the fair value of the earn-out liability, which resulted in a reduction of $ 5.0 million and additional expenses of $ 9.2 million and $ 3.1 million, respectively, in the Company’s Consolidated Statements of Operations. The final earn-out was achieved as of September 30, 2024 and was fully paid during the fourth quarter of 2024. The Company monitors its investments for impairment and records appropriate reductions in carrying value when necessary. During the years ended December 31, 2024 and 2023, the Company recorded no other-than-temporary impairment charges on its investments. In 2018, the Company made an investment in a non-marketable equity security of a private company. This investment was accounted for under the equity method of accounting, and the Company accounted for its equity method share of the income (loss) on a quarterly basis. During the fourth quarter of 2023, the Company sold its 25.0 % ownership share in the equity investment for approximately $ 25.0 million, which was included, net of withholding taxes paid, in prepaid and other current assets in the Company’s Consolidated Balance Sheet as of December 31, 2023. The Company recognized a gain of $ 25.0 million related to the sale of the Company’s 25.0 % ownership share in the non-marketable equity security. The gain was offset by transaction costs of approximately $ 1.1 million, resulting in a net gain of approximately $ 23.9 million, which was included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2023. Subsequently, the Company received proceeds, net of tax, of approximately $ 22.8 million from this transaction during the first quarter of 2024. During the year ended December 31, 2022, the Company recorded a gain on fair value of approximately $ 3.5 million related to the sale of an equity security with an immaterial carrying value in its Consolidated Statements of Operations. During the years ended December 31, 2024 and 2023, there were no transfers of financial instruments between different categories of fair value. Information regarding the Company’s goodwill and long-lived assets balances are disclosed in Note 6, “Intangible Assets and Goodwill.” 77 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Leases The Company has a lease agreement with 237 North First Street Holdings, LLC for an office space located at 4453 North First Street in San Jose, California (the “Lease”). The Lease has a term of 128 months from the amended commencement date in April 2020. The annual base rent increases each year to certain fixed amounts over the course of the term. In addition to the base rent, the Company will also pay operating expenses, insurance expenses, real estate taxes and a management fee. The Lease allows for an option to expand, wherein the Company has the right of first refusal to rent additional space in the building. The Company has a one-time option to extend the Lease for a period of 60 months and may elect to terminate the Lease, via written notice to the Landlord, in the event the office space is damaged or destroyed. These options were not recognized as part of operating lease right-of-use assets and operating lease liabilities. The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the Consolidated Balance Sheet as of December 31, 2024 (in thousands): Years ending December 31, Amount 2025 $ 7,105 2026 7,421 2027 5,906 2028 4,773 2029 4,790 Thereafter 4,661 Total minimum lease payments 34,656 Less: amount of lease payments representing interest ( 4,505 ) Present value of future minimum lease payments 30,151 Less: current obligations under leases ( 5,617 ) Long-term lease obligations $ 24,534 As of December 31, 2024, the weighted-average remaining lease term for the Company’s operating leases was 5.3 years, and the weighted-average discount rate used to determine the present value of the Company’s operating leases was 7.6 %. Operating lease costs included in research and development and selling, general and administrative costs in the Company’s Consolidated Statements of Operations were $ 5.5 million, $ 6.0 million and $ 7.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. Cash paid for amounts included in the measurement of operating lease liabilities were $ 6.1 million, $ 6.7 million and $ 8.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. 11. Balance Sheet Details Inventories (1) Inventories consisted of the following: As of December 31, (In thousands) 2024 2023 Raw materials $ 14,777 $ 17,483 Work in process 9,646 5,299 Finished goods 20,211 13,372 Total $ 44,634 $ 36,154 ______________________________________ (1) As of December 31, 2024 and 2023, the Company had inventory reserve balances of approximately $ 6.7 million and $ 6.0 million included in the Consolidated Balance Sheets, respectively. 78 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Property and Equipment, net Property and equipment, net is comprised of the following: As of December 31, (In thousands) 2024 2023 Computer software $ 44,745 $ 44,226 Computer equipment 38,282 36,198 Leasehold improvements 31,973 27,810 Machinery 49,204 30,446 Furniture and fixtures 14,164 12,561 Construction in progress 7,789 5,660 Property and equipment, gross 186,157 156,901 Less accumulated depreciation and amortization ( 110,648 ) ( 89,093 ) Property and equipment, net $ 75,509 $ 67,808 Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $ 26.1 million, $ 37.7 million and $ 26.0 million, respectively. Other Current Liabilities Other current liabilities are comprised of the following: As of December 31, (In thousands) 2024 2023 EDA tools software licenses liability $ 8,438 $ 14,566 Price protection liability 4,677 6,563 Other current liabilities 4,198 5,469 Total $ 17,313 $ 26,598 Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is comprised of the following: As of December 31, (In thousands) 2024 2023 Foreign currency translation adjustments $ ( 1,144 ) $ ( 913 ) Unrealized loss on available-for-sale securities, net of tax ( 116 ) ( 356 ) Total $ ( 1,260 ) $ ( 1,269 ) 12. Convertible Notes The Company did not have any convertible notes outstanding as of December 31, 2024 and 2023. On March 2, 2022, the Company entered into individual, privately negotiated transactions with certain holders of its outstanding 1.375% Convertible Senior Notes due 2023 (“2023 Notes”), pursuant to which the Company paid an aggregate of approximately $ 199.1 million in cash for the repurchase of approximately $ 123.1 million aggregate principal amount of its 2023 Notes (“Q1 2022 Partial Notes Repurchase”). The cash consideration was based on a volume-weighted average price of $ 29.6789 for the 19-trading day measurement period ending March 29, 2022. Of the $ 123.1 million aggregate principal amount, approximately $ 107.9 million was settled on March 31, 2022 for $ 174.5 million in cash. The remaining $ 15.2 million aggregate principal amount was settled on April 1, 2022 for $ 24.6 million in cash. In addition, this transaction resulted in a loss on extinguishment of debt of $ 66.5 million and a loss on fair value adjustment of derivatives, net of $ 8.3 million. On August 11, 2022, the Company entered into individual, privately negotiated transactions with certain holders of its outstanding 2023 Notes, pursuant to which the Company paid an aggregate of approximately $ 58.9 million in cash for the repurchase of approximately $ 39.0 million aggregate principal amount of its 2023 Notes (“Q3 2022 Partial Notes Repurchase”). 79 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The cash consideration was based on a volume-weighted average price of $ 27.8456 for the 10-trading day measurement period ending August 25, 2022. In addition, this transaction resulted in a loss on extinguishment of debt of $ 17.1 million and a loss on fair value adjustment of derivatives, net of $ 2.3 million. Upon entering into the Q1 2022 and Q3 2022 Partial Notes Repurchase agreements, the conversion feature related to the 2023 Notes repurchased, as well as the settlements of the convertible senior note hedges and warrants, were subject to derivative accounting. As described in the preceding paragraphs above, the combination of these two transactions resulted in $ 10.6 million in losses on fair value adjustment of derivatives, net, for the year ended December 31, 2022. During the first quarter of 2023, the holders of the remaining $ 10.4 million aggregate principal amount of the 2023 Notes elected to convert the notes pursuant to the original terms of the conversion feature. Accordingly, upon maturity, the Company paid $ 10.4 million in cash to settle the aggregate principal amount of the 2023 Notes and delivered approximately 0.3 million shares of the Company's common stock to settle the conversion spread. In connection with the Q1 2022 Partial Notes Repurchase, the Company entered into agreements with certain financial institutions to retire the corresponding portions of convertible senior note hedges and warrants the Company had previously entered into with the counterparties in connection with the issuance of the 2023 Notes. Upon settlement, the Company received $ 72.4 million in cash for the retirement of the proportionate amount of convertible senior note hedges and paid $ 55.1 million in cash for the retirement of the proportionate amount of warrants during the first quarter of 2022. In connection with the Q3 2022 Partial Notes Repurchase, the Company entered into agreements with certain financial institutions to retire the corresponding portions of convertible senior note hedges and warrants the Company had previously entered into with the counterparties in connection with the issuance of the 2023 Notes. Upon settlement, the Company received $ 19.3 million in cash for the retirement of the proportionate amount of convertible senior note hedges and paid $ 14.4 million in cash for the retirement of the proportionate amount of warrants during the third quarter of 2022. In connection with the settlement of the conversion of the remaining 2023 Notes, the Company received 0.3 million shares of the Company’s common stock for the retirement of the remaining convertible senior note hedges and paid $ 10.7 million in cash for the retirement of the remaining warrants during the first quarter of 2023. Additionally, the retirement of the remaining warrants was subject to derivative accounting, resulting in a loss on fair value adjustment of derivatives of $ 0.2 million for the year ended December 31, 2023. As of December 31, 2024, none of the note hedges and warrants remained outstanding. For the year ended December 31, 2024, there was no interest expense related to the convertible notes. Interest expense related to the convertible notes for the years ended December 31, 2023 and 2022 was immaterial. 13. Commitments and Contingencies As of December 31, 2024, the Company’s material contractual obligations were as follows: (In thousands) Total 2025 2026 2027 2028 2029 Contractual obligations (1) (2) Software licenses (3) $ 12,034 $ 9,675 $ 1,484 $ 875 $ — $ — Other contractual obligations 268 131 137 — — — Acquisition retention bonuses (4) 260 260 — — — — Total $ 12,562 $ 10,066 $ 1,621 $ 875 $ — $ — ______________________________________ (1) The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $ 132.2 million, including $ 22.8 million recorded as a reduction of long-term deferred tax assets and $ 109.4 million in long-term income taxes payable, as of December 31, 2024. As noted below in Note 18, “Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the timing of the outcome at this time. (2) For the Company’s lease commitments as of December 31, 2024, refer to Note 10, “Leases.” (3) The Company has commitments with various software vendors for agreements generally having terms longer than one year . 80 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (4) In connection with the acquisitions of Hardent in the second quarter of 2022 and PLDA in the third quarter of 2021, the Company is obligated to pay retention bonuses to certain employees subject to certain eligibility and acceleration provisions, including the condition of employment. Indemnifications From time to time, the Company indemnifies certain customers as a necessary means of doing business. Indemnification covers customers for losses suffered or incurred by them as a result of any patent, copyright, or other IP infringement or any other claim by any third party arising as a result of the applicable agreement with the Company. The Company generally attempts to limit the maximum amount of indemnification that the Company could be required to make under these agreements to the amount of fees received by the Company, however, this may not always be possible. The fair value of the liability as of December 31, 2024 and 2023, respectively, was not material. 14. Equity Incentive Plans and Stock-Based Compensation Equity Incentive Plans The Company has two equity incentive plans under which grants are currently outstanding: the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2019 Inducement Equity Incentive Plan (the “2019 Inducement Plan”). The 2015 Plan and 2019 Inducement Plan were the Company’s only plans for providing stock-based incentive awards to eligible employees, executive officers, non-employee directors and consultants as of December 31, 2024. Grants under all plans typically have a requisite service period of 60 months or 48 months, have straight-line vesting schedules and expire not more than 10 years from date of grant. A summary of shares available for grant under the Company’s plans is as follows: Shares Available for Grant Total shares available for grant as of December 31, 2021 10,492,178 Nonvested equity stock and stock units granted (1) (2) ( 4,107,633 ) Nonvested equity stock and stock units forfeited (1) 1,271,224 Total shares available for grant as of December 31, 2022 7,655,769 Increase in shares approved for issuance (3) 5,210,000 Nonvested equity stock and stock units granted (1) (4) ( 2,082,334 ) Nonvested equity stock and stock units forfeited (1) 1,170,715 Total shares available for grant as of December 31, 2023 11,954,150 Stock options expired 1,125 Nonvested equity stock and stock units granted (1) (5) ( 1,482,074 ) Nonvested equity stock and stock units forfeited (1) 416,677 Total shares available for grant as of December 31, 2024 10,889,878 ______________________________________ (1) For purposes of determining the number of shares available for grant under the 2015 Plan against the maximum number of shares authorized, each restricted stock unit granted prior to April 27, 2023 reduces the number of shares available for grant by 1.5 shares and each restricted stock unit forfeited increases shares available for grant by 1.5 shares. Each restricted stock unit granted on or after April 27, 2023 reduces the number of shares available for grant by 1.0 share and each restricted stock unit forfeited increases shares available for grant by 1.0 share. (2) Amount includes approximately 0.6 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in 2022 and discussed under the section titled “Nonvested Equity Stock and Stock Units” below. (3) On April 27, 2023, the Company’s stockholders approved these additional shares to be reserved for issuance under the 2015 Plan. (4) Amount includes approximately 0.2 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in 2023 and discussed under the section titled “Nonvested Equity Stock and Stock Units” below. 81 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (5) Amount includes approximately 0.2 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in 2024 and discussed under the section titled “Nonvested Equity Stock and Stock Units” below. General Stock Option Information The following table summarizes stock option activity under the Company’s equity incentive plans for the years ended December 31, 2024, 2023 and 2022 and information regarding stock options outstanding and vested as of December 31, 2024: Options Outstanding Weighted-Average Remaining Contractual Term (years) Number of Shares Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value (In thousands) Outstanding as of December 31, 2021 549,581 $ 10.71 Options exercised ( 117,138 ) $ 7.43 Outstanding as of December 31, 2022 432,443 $ 11.60 Options exercised ( 307,711 ) $ 11.61 Outstanding as of December 31, 2023 124,732 $ 11.60 Options exercised ( 33,607 ) $ 9.42 $ 1,460 Options expired ( 1,125 ) $ 8.76 Outstanding and vested as of December 31, 2024 90,000 $ 12.45 3.53 $ 3,637 Employee Stock Purchase Plan During the years ended December 31, 2024, 2023 and 2022, the Company had one employee stock purchase plan, the 2015 Employee Stock Purchase Plan (“2015 ESPP”). Employees generally will be eligible to participate in the plan if they are employed by the Company for more than 20 hours per week and more than five months in a fiscal year. The 2015 ESPP provides for six -month offering periods, with a new offering period commencing on the first trading day on or after May 1 and November 1 of each year. Under the plan, employees may purchase stock at the lower of 85 % of the fair market value of the Company’s common stock at the beginning of the offering period (the enrollment date) or the end of each offering period (the purchase date). Employees generally may not purchase more than the number of shares having a value greater than $ 25,000 in any calendar year, as measured at the purchase date. The Company issued 119,350 shares at an average price of $ 43.14 per share during the year ended December 31, 2024. The Company issued 172,711 shar es at an average price of $ 31.10 per share during the year ended December 31, 2023. The Company issued 255,614 shares at an average price of $ 20.60 per share during the year ended December 31, 2022. As of December 31, 2024, 2.3 million shares under the ESPP remained available for issuance. Stock-Based Compensation Stock Options There were no stock options granted during the years ended December 31, 2024, 2023 and 2022, respectively. There was no stock-based compensation expense related to stock options for the year ended December 31, 2024. Stock-based compensation expenses related to stock options were immaterial for the years ended December 31, 2023 and 2022. As of December 31, 2023, all compensation cost net of expected forfeitures, related to unvested stock-based compensation arrangements granted under the stock option plans had been fully recognized. As of December 31, 2024, all stock options had been fully vested and there were no stock options vested during the year ended December 31, 2024. The total fair value of options vested f or the years ended December 31, 2023 and 2022 were $ 0.5 million and $ 1.7 million, respectively. Employee Stock Purchase Plan During the years ended December 31, 2024, 2023 and 2022, the Company recorded stock-based compensation expenses related to the 2015 ESPP of $ 1.9 million, $ 1.8 million and $ 1.7 million, respectively. 82 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of December 31, 2024, there was $ 1.0 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under the 2015 ESPP. That cost is expected to be recognized over four months . Valuation Assumptions The Company estimates the fair value of stock awards using the BSM model. The BSM model determines the fair value of stock-based compensation and is affected by the Company’s stock price on the date of the grant, as well as assumptions regarding a number of highly complex and subjective variables. These variables include expected volatility, expected life of the award, expected dividend rate and expected risk-free rate of return. The assumptions for expected volatility and expected life are the two assumptions that significantly affect the grant-date fair value. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. The fair value of stock awards is estimated as of the grant date using the BSM option-pricing model assuming a dividend yield of 0 % and the additional weighted-average assumptions as listed in the table below. Employee Stock Purchase Plan for Years Ended December 31, 2024 2023 2022 Employee Stock Purchase Plan Expected stock price volatility 47 %- 54 % 48 %- 53 % 40 %- 44 % Risk free interest rate 4.42 %- 5.43 % 5.14 %- 5.51 % 1.49 %- 4.58 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value of purchase rights granted under the purchase plan $ 14.96 $ 14.86 $ 8.02 Expected Stock Price Volatility: Given the volume of market activity in its market traded options, the Company determined that it would use the implied volatility of its nearest-to-the-money traded options. The Company believes that the use of implied volatility is more reflective of market conditions and a better indicator of expected volatility than historical volatility. If there is not sufficient volume in its market traded options, the Company will use an equally weighted blend of historical and implied volatility. Risk-free Interest Rate: The Company bases the risk-free interest rate used in the BSM valuation method on implied yield currently available on the U.S. Treasury zero-coupon issues with an equivalent term. Where the expected terms of the Company’s stock-based awards do not correspond with the terms for which interest rates are quoted, the Company uses an approximation based on rates on the closest term currently available. Expected Term: The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected term was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The expected term of ESPP grants is based upon the length of each respective purchase period. Nonvested Equity Stock and Stock Units The Company grants nonvested equity stock units to officers, employees and directors. For the years ended December 31, 2024, 2023 and 2022, the Company granted nonvested equity stock units totaling 1.3 million, 1.3 million and 2.3 million shares, respectively. These awards have a service condition, generally a service period of four years , except in the case of grants to directors, for which the service period is one year . For the years ended December 31, 2024, 2023 and 2022, the nonvested equity stock units were valued at the date of grant, giving them a fair value of approximately $ 74.8 million, $ 60.7 million and $ 65.6 million, respectively. During the years ended December 31, 2024, 2023 and 2022, the Company granted performance unit awards to certain Company executive officers with vesting subject to the achievement of certain performance and/or market conditions. The ultimate number of performance units that can be earned can range from 0 % to 200 % of target depending on performance relative to target over the applicable period. The shares earned will vest on the third anniversary of the date of grant. The Company’s shares available for grant have been reduced to reflect the shares that could be earned at the maximum target. For the years ended December 31, 2024, 2023 and 2022, the Company recorded stock-based compensation expense of approximately $ 43.0 million, $ 43.1 million and $ 33.8 million, respectively, related to all outstanding nonvested equity stock grants. 83 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Unrecognized compensation cost related to all nonvested equity stock grants, net of estimated forfeitures, was approximately $ 79.9 million as of December 31, 2024. This amount is expected to be recognized over a weighted-average period of 1.9 years. The following table reflects the activity related to nonvested equity stock and stock units for the years ended December 31, 2024, 2023 and 2022: Nonvested Equity Stock and Stock Units Shares Weighted-Average Grant-Date Fair Value Nonvested as of December 31, 2021 4,718,385 $ 16.62 Granted 2,338,255 $ 28.10 Vested ( 1,853,260 ) $ 14.42 Forfeited ( 485,320 ) $ 20.48 Nonvested as of December 31, 2022 4,718,060 $ 22.78 Granted 1,268,973 $ 46.93 Vested ( 1,797,002 ) $ 18.07 Forfeited ( 759,839 ) $ 28.60 Nonvested as of December 31, 2023 3,430,192 $ 32.90 Granted 1,312,367 $ 57.03 Vested ( 1,289,945 ) $ 27.14 Forfeited ( 302,453 ) $ 39.07 Nonvested as of December 31, 2024 3,150,161 $ 44.72 15. Stockholders’ Equity Share Repurchase Programs On October 29, 2020, the Board approved a share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2020 Repurchase Program”). Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations. There is no expiration date applicable to the 2020 Repurchase Program. During the years ended December 31, 2024, 2023 and 2022, the Company repurchased shares of its common stock under the 2020 Repurchase Program as discussed below. On September 9, 2022, the Company entered into an accelerated share repurchase program with Wells Fargo Bank, National Association (“Wells Fargo”) (the “2022 ASR Program”). The 2022 ASR Program was part of the 2020 Repurchase Program. Under the 2022 ASR Program, the Company pre-paid to Wells Fargo the $ 100.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 3.1 million shares of its common stock from Wells Fargo in the third quarter of 2022, which were retired and recorded as an $ 80.0 million reduction to stockholders’ equity. The remaining $ 20.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company’s stock. During the fourth quarter of 2022, the accelerated share repurchase program was completed and the Company received an additional 0.1 million shares of its common stock, which were retired, as the final settlement of the 2022 ASR Program. On August 10, 2023, the Company entered into an accelerated share repurchase program with Royal Bank of Canada (“RBC”) (the “2023 ASR Program”). The 2023 ASR Program was part of the 2020 Repurchase Program. Under the 2023 ASR Program, the Company pre-paid to RBC the $ 100.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 1.6 million shares of its common stock from RBC on August 11, 2023, which were retired and recorded as an $ 80.0 million reduction to stockholders’ equity. The remaining $ 20.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company’s stock. On September 22, 2023, the accelerated share repurchase program was completed and the Company received an additional 0.2 million shares of its common stock, which were retired, as the final settlement of the 2023 ASR Program. On February 29, 2024, the Company entered into an accelerated share repurchase program with Royal Bank of Canada (“RBC”) (the “2024 ASR Program”). The 2024 ASR Program was part of the 2020 Repurchase Program. Under the 2024 ASR 84 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Program, the Company pre-paid to RBC the $ 50.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 0.7 million shares of its common stock from RBC on March 1, 2024, which were retired and recorded as a $ 40.0 million reduction to stockholders’ equity. The remaining $ 10.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company’s stock. On March 18, 2024, the accelerated share repurchase program was completed and the Company received an additional 0.1 million shares of its common stock, which were retired, as the final settlement of the 2024 ASR Program. On November 2, 2023, the Company entered into a share repurchase plan (the “Buying Plan”) with RBC Capital Markets, LLC (“RBCCM”). The Buying Plan was part of the 2020 Repurchase Program. Under the Buying Plan, RBCCM commenced purchases for a 12-month period starting on November 2, 2023 and ending on November 1, 2024, with a provision to terminate sooner pursuant to the Buying Plan (the “Repurchase Period”). During the Repurchase Period, RBCCM may purchase an aggregate amount of $ 50.0 million of the Company’s common stock, and its execution is dependent on the Company’s stock price reaching certain levels. Share repurchases could not exceed $ 25.0 million in a quarter. During the year ended December 31, 2023, an immaterial amount of shares were repurchased, retired and recorded as a reduction to stockholders’ equity. During the first quarter of 2024, the Buying Plan was amended and as a result, no purchases were made from the Buying Plan during the period from March 1, 2024 to March 28, 2024, while the 2024 ASR Program was in effect. During the third quarter of 2024, the Buying Plan was further amended to allow RBCCM to purchase an aggregate amount of $ 100.0 million of the Company’s common stock during the Repurchase Period, not to exceed $ 50.0 million in a quarter. The execution of share repurchases is dependent on the Company’s stock price reaching certain levels. During the year ended December 31, 2024, the Company repurchased approximately 1.4 million shares for approximately $ 63.1 million as part of the Buying Plan, which were retired and recorded as a reduction to stockholders’ equity. Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. As of December 31, 2024, the Company recorded an immaterial excise tax liability on its accompanying Consolidated Balance Sheet. As of December 31, 2024, there remained an outstanding authorization to repurchase approximately 5.7 million shares of the Company’s outstanding common stock under the 2020 Repurchase Program. The Company records share repurchases as a reduction to stockholders’ equity. The Company records a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock in accordance with its accounting policy. During the years ended December 31, 2024, 2023 and 2022, the cumulative price of $ 47.9 million, $ 94.7 million and $ 90.1 million, respectively, was recorded as increases to accumulated deficit. 16. Benefit Plans The Company has a 401(k) Plan (the “401(k) Plan”) qualified under Section 401(k) of the Internal Revenue Code of 1986. Each eligible employee may elect to contribute up to 60 % of the employee’s annual compensation to the 401(k) Plan, up to the Internal Revenue Service limit. The Company, at the discretion of its Board of Directors, may match employee contributions to the 401(k) Plan. The Company matches 50 % of eligible employee’s contribution, up to the first 6 % of an eligible employee’s qualified earnings. For the years ended December 31, 2024, 2023 and 2022, the Company made matching contributions totaling approximately $ 2.1 million, $ 2.0 million and $ 1.9 million, respectively. 17. Restructuring and Other Charges 2023 Restructuring Plan In June 2023, the Company initiated a restructuring program to reduce overall expenses to improve future profitability by reducing the Company’s overall spending (the “2023 Restructuring Plan”). In connection with this restructuring program, the Company initiated a plan resulting in a reduction of 42 employees. During the year ended December 31, 2023, the Company recorded charges of approximately $ 9.4 million to “Restructuring and other charges” in its Consolidated Statement of Operations, related to the reduction in workforce, as well as write-downs of obligations related to certain IP development costs and software licenses for engineering development tools. The 2023 Restructuring Plan was materially completed in the fourth quarter of 2023. 85 18. Income Taxes Income (loss) before taxes consisted of the following: For the Years Ended December 31, (In thousands) 2024 2023 2022 Domestic $ 190,382 $ 154,434 $ ( 16,663 ) Foreign 9,661 32,726 8,838 $ 200,043 $ 187,160 $ ( 7,825 ) The provision for (benefit from) income taxes was comprised of: For the Years Ended December 31, (In thousands) 2024 2023 2022 Federal: Current $ 2,760 $ 1,075 $ 183 Deferred ( 9,447 ) ( 126,734 ) 2,479 State: Current 468 893 ( 215 ) Deferred 1,245 ( 17,264 ) 24 Foreign: Current 26,869 ( 3,362 ) 5,828 Deferred ( 1,673 ) ( 1,352 ) ( 1,814 ) $ 20,222 $ ( 146,744 ) $ 6,485 The differences between the Company’s effective tax rate and the U.S. federal statutory regular tax rate were as follows: For the Years Ended December 31, 2024 2023 2022 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income tax expense (benefit) 0.9 ( 8.7 ) 6.1 Withholding tax 8.4 3.9 ( 36.6 ) Foreign rate differential ( 1.4 ) ( 2.6 ) ( 28.3 ) Research and development credit ( 1.9 ) ( 2.9 ) 4.8 Executive compensation 4.0 3.9 ( 49.0 ) Stock-based compensation ( 6.1 ) ( 5.2 ) 47.9 Foreign tax credit ( 8.4 ) ( 2.5 ) 57.4 Foreign-derived intangible income deduction ( 6.8 ) ( 1.9 ) 70.5 Acquisition ( 0.1 ) 1.6 ( 25.1 ) Debt extinguishment — — ( 226.7 ) Other 0.5 0.3 ( 1.0 ) Valuation allowance — ( 85.3 ) 76.1 10.1 % ( 78.4 ) % ( 82.9 ) % 86 The components of the net deferred tax assets (liabilities) were as follows: As of December 31, (In thousands) 2024 2023 Deferred tax assets: Lease liabilities $ 6,384 $ 6,607 Other timing differences, accruals and reserves 3,893 5,306 Deferred equity compensation 6,678 3,973 Net operating loss carryovers 12,003 14,578 Capitalized research 96,739 77,244 Tax credits 47,960 50,445 Total gross deferred tax assets 173,657 158,153 Deferred tax liabilities: Lease right-of-use assets ( 4,498 ) ( 4,589 ) Depreciation and amortization ( 9,077 ) ( 5,078 ) Total gross deferred tax liabilities ( 13,575 ) ( 9,667 ) Total net deferred tax assets 160,082 148,486 Valuation allowance ( 26,790 ) ( 25,056 ) Net deferred tax assets $ 133,292 $ 123,430 As of December 31, (In thousands) 2024 2023 Reported as: Non-current deferred tax assets $ 136,466 $ 127,892 Non-current deferred tax liabilities ( 3,174 ) ( 4,462 ) Net deferred tax assets $ 133,292 $ 123,430 The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. During 2023, based on all available positive and negative evidence, the Company determined that it was appropriate to release the valuation allowance on the majority of the Company’s U.S. federal and other state deferred tax assets. The Company recognized a $ 177.9 million tax benefit during the year ended December 31, 2023 as a result of the valuation allowance release. Upon considering the relative impact of all evidence during 2024, both negative and positive, and the weight accorded to each, the Company concluded that it was more likely than not that the majority of its deferred tax assets would be realizable, with the exception of primarily its California research and development credits that have not met the “more likely than not” realization threshold criteria. As a result, the Company continues to maintain a valuation allowance on only those deferred tax assets that it does not think will be realizable. The following table presents the tax valuation allowance information for the years ended December 31, 2024, 2023 and 2022: (In thousands) Balance at Beginning of Period Charged (Credited) to Operations Charged to Other Account* Valuation Allowance Release Balance at End of Period Tax Valuation Allowance Year ended December 31, 2022 $ 206,874 ( 7,233 ) 2,242 — $ 201,883 Year ended December 31, 2023 $ 201,883 1,776 ( 717 ) ( 177,886 ) $ 25,056 Year ended December 31, 2024 $ 25,056 1,784 ( 50 ) — $ 26,790 ______________________________________ * Amounts not charged to operations are charged to other comprehensive income or retained earnings. 87 As of December 31, 2024, the Company had California net operating loss carryforwards of $ 171.9 million. As of December 31, 2024, the Company had federal research and development tax credit carryforwards of $ 41.6 million and foreign tax credits of $ 1.0 million. As of December 31, 2024, the Company had California research and development tax credit carryforwards of $ 30.0 million and California alternative minimum tax credit carryforwards of $ 0.5 million. The federal research and development tax credits begin to expire in 2028. The Company’s foreign tax credits will continue to carryover and do not begin to expire until 2028, if unused. The California net operating losses begin to expire in 2031. The California research and development credits carry forward indefinitely. In the event of a change in ownership, as defined under federal and state tax laws, the Company’s net operating loss and tax credit carryforwards could be subject to annual limitations. The annual limitations could result in the expiration of the net operating loss and tax credit carryforwards prior to utilization. As of December 31, 2024, the Company had $ 203.8 million of unrecognized tax benefits, before interest accrual, including $ 22.8 million recorded as a reduction of long-term deferred tax assets, $ 74.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea and $ 106.2 million recorded to long-term income taxes payable, which are primarily comprised of $ 105.1 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea. As a result of recent court rulings in 2023, the Company determined that it is more likely than not that withholding taxes paid in South Korea in the preceding five years are recoverable. In October 2023, the Company filed refund claims for withholding taxes paid in South Korea in the amount of $ 82.7 million related to the period from the fourth quarter of 2018 through the third quarter of 2023. The Company intends to file additional refund claims in the future for $ 4.2 million of withholding taxes paid in the fourth quarter of 2023 and $ 18.2 million paid in 2024. Therefore, the Company recorded long-term tax receivables of $ 110.0 million and $ 88.8 million as of December 31, 2024 and 2023, respectively. If the South Korea withholding taxes are recovered through the refund claim process, the U.S. foreign tax credit claimed for these withholding taxes on historical federal tax returns will be forfeited. Therefore, during the year ended December 31, 2023, the Company recorded a long-term tax payable in the amount of $ 72.6 million and a reduction to deferred tax assets related to foreign tax credits in the amount of $ 10.1 million. During the year ended December 31, 2024, the Company utilized most of the foreign tax credits. Therefore, the Company recorded a long-term tax payable of $ 105.1 million as of December 31, 2024. These amounts exclude interest and reflect the future U.S. federal tax liability in the event of filing amended federal tax returns to revise the foreign tax credit amounts. The recovery of South Korea withholding taxes paid before the fourth quarter of 2018 of $ 74.8 million is uncertain due to the statute of limitations for filing a refund claim. Thus, the Company did not record a long-term tax receivable and included the amount in the uncertain tax benefit disclosure below. As of December 31, 2023, the Company had $ 185.7 million of unrecognized tax benefits, including $ 31.7 million recorded as a reduction of long-term deferred tax assets, $ 75.0 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea and $ 78.9 million recorded to long-term income taxes payable, which were primarily comprised of $ 77.1 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea. A reconciliation of the beginning and ending amounts of unrecognized income tax benefits for the years ended December 31, 2024, 2023 and 2022 was as follows: For the Years Ended December 31, (In thousands) 2024 2023 2022 Balance as of January 1 $ 184,921 $ 164,531 $ 146,215 Tax positions related to current year: Additions 19,844 19,403 18,515 Tax positions related to prior years: Additions — 1,378 — Reductions ( 971 ) ( 391 ) ( 199 ) Balance as of December 31 $ 203,794 $ 184,921 $ 164,531 88 The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision (benefit). As of December 31, 2024 and 2023, an immaterial amount of interest and penalties was included in long-term income taxes payable. Rambus files income tax returns for the U.S., California, India and various other state and foreign jurisdictions. The U.S. federal returns are subject to examination from 2021 and forward. The California returns are subject to examination from 2020 and forward. In addition, any research and development credit carryforward or net operating loss carryforward generated in prior years and utilized in these or future years may also be subject to examination. The India returns are under examination by the Indian tax administration for tax years beginning with 2011, except for 2012 through 2016, which were assessed in the Company’s favor, and are subject to examination from 2017 and forward. These examinations may result in proposed adjustments to the income taxes as filed during these periods. Management regularly assesses the likelihood of outcomes resulting from income tax examinations to determine the adequacy of their provision for income taxes and believes their provision for unrecognized tax benefits is adequate. The estimated potential reduction in the Company’s unrecognized tax benefits in the next 12 months would not be material. As of December 31, 2024, no other income taxes (state or foreign) have been provided on undistributed earnings of approximately $ 58.0 million from the Company’s international subsidiaries since these earnings have been, and under current plans will continue to be, indefinitely reinvested outside the United States, with the exception of France. If the non-France earnings were distributed, the Company would incur approximately $ 1.4 million of foreign withholding taxes and an immaterial amount of U.S. taxes. 19. Litigation and Contingent Liability Rambus is not currently a party to any material pending legal proceeding; however, from time to time, Rambus may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management attention and resources and other factors. The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies. 20. Divestiture 2023 Divestiture In July 2023, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with Cadence Design Systems, Inc. (the “Purchaser”), pursuant to which the Company agreed to sell certain assets and the Purchaser agreed to assume certain liabilities from the Company, in each case with respect to the Company’s PHY IP group, for $ 110.0 million in cash, subject to certain adjustments and certain closing conditions (the “Transaction”). The decision to sell this business reflects the evolution of the Company’s core semiconductor business to focus on the development of digital IP and chips, including novel memory solutions for high-performance computing, to support the continued advancement of the data center and artificial intelligence. The Transaction was completed on September 6, 2023 and resulted in net proceeds of approximately $ 106.3 million, which consisted of the initial selling price of $ 110.0 million offset by approximately $ 3.7 million related to certain purchase price adjustments. The Company recognized a net gain on divestiture of the PHY IP group in its Consolidated Statements of Operations of approximately $ 90.8 million during the year ended December 31, 2023. Transaction costs of approximately $ 1.4 million were included in the net gain of $ 90.8 million. The divestiture of the PHY IP group did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. Concurrent with the Transaction, the Company also recorded a charge of approximately $ 10.0 million in its Consolidated Statements of Operations during the year ended December 31, 2023. The charge was primarily related to the accelerated amortization of software licenses that were not directly part of the PHY IP disposal group. 89 21. Acquisition 2022 Acquisition Hardent, Inc. On May 20, 2022, (the “Closing Date”), the Company completed its acquisition of Hardent, a leading electronic design company, by acquiring all of its outstanding shares. The Company acquired Hardent for a total consideration of approximately $ 16.1 million, which consisted of $ 14.7 million in initial cash consideration paid at the Closing Date, $ 1.2 million deposited into an escrow account to fund indemnification obligations to be released within 18 months after the Closing Date and $ 0.2 million deposited into an escrow account to fund other contractual provisions related to certain working capital adjustments. The addition of the technology and expertise from Hardent augments the Company’s CXL memory interconnect initiative. As part of the acquisition, the Company agreed to pay certain Hardent employees approximately $ 1.2 million in cash over three years following the Closing Date (the “Retention Bonus”), to be paid in three equal installments on each of the dates that were 12 months, 24 months and 36 months following the Closing Date. The Retention Bonus payouts are subject to the condition of continued employment, therefore the Retention Bonus payouts will be treated as compensation and will be expensed ratably over the retention period. As of December 31, 2022, the Company had incurred approximately $ 1.2 million in external acquisition costs in connection with the transaction, which were expensed as incurred. The fair value of the intangible assets acquired was determined by management primarily by using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the existing technologies less charges representing the contribution of other assets to those cash flows. The fair values of the remaining assets acquired and liabilities assumed approximated their carrying values at the Closing Date. The Company performed a valuation of the net assets acquired as of the Closing Date. The total consideration from the acquisition was allocated as of the Closing Date and reflects adjustments made during the measurement period to finalize the purchase price accounting, as follows: (In thousands) Total Cash and cash equivalents $ 209 Accounts receivable 1,088 Unbilled receivables 239 Prepaid expenses and other current assets 16 Identified intangible assets 5,000 Goodwill 12,069 Accounts payable ( 55 ) Deferred revenue ( 578 ) Income taxes payable ( 466 ) Deferred tax liability ( 1,325 ) Other current liabilities ( 56 ) Total $ 16,141 The goodwill arising from the acquisition was primarily attributed to synergies related to the combination of new and complementary technologies of the Company and the assembled workforce of the acquired business. This goodwill was not deductible for tax purposes. 90 The identified intangible assets assumed in the acquisition of Hardent were recognized as follows based upon their estimated fair values as of the acquisition date: Total Estimated Weighted-Average Useful Life (in thousands) (in years) Existing technology $ 4,800 5 years Customer contracts and contractual relationships 200 2 years Total $ 5,000 Unaudited Pro Forma Combined Consolidated Financial Information The following pro forma financial information presents the combined results of operations for the Company and Hardent as if the acquisition had occurred on January 1, 2021. The pro forma financial information was prepared for comparative purposes only and does not purport to be indicative of the actual operating results that would have been recorded had the acquisition actually taken place on January 1, 2021, and should not be taken as indicative of future consolidated operating results. Additionally, the pro forma financial results do not include any anticipated synergies or other expected benefits from the acquisition: For the Year Ended (In thousands) December 31, 2022 (unaudited) Total revenue $ 457,852 Net loss $ ( 13,251 ) The pro forma net loss for 2022 was adjusted to exclude $ 1.2 million of acquisition-related costs incurred in 2023. 91 INDEX TO EXHIBITS Exhibit Number Description of Document 3.1(1) Amended and Restated Certificate of Incorporation of Registrant dated April 27, 2023. 3.2(1) Amended and Restated Bylaws of Registrant dated April 27, 2023. 4.1(2) Form of Registrant’s Common Stock Certificate. 4.2(3) Description of Securities. 10.1(4)* Form of Indemnification Agreement entered into by Registrant with each of its directors and executive officers. 10.2(5)* Form of Change of Control Severance Agreement, Agreement entered into by Registrant with each of its named executive officers other than its chief executive officer. 10.3(6)* 2006 Equity Incentive Plan, as amended. 10.4(6)* Forms of agreements under the 2006 Equity Incentive Plan, as amended. 10.5(1)* 2015 Equity Incentive Plan, as amended. 10.6(7)* Form of Restricted Stock Unit Agreement (2015 Equity Incentive Plan). 10.7(7)* Form of Stock Option Agreement (2015 Equity Incentive Plan). 10.8(8)* 2015 Employee Stock Purchase Plan, as amended. 10.9+ Settlement Agreement, dated January 19, 2010, among Registrant, Samsung Electronics Co., Ltd, Samsung Electronics America, Inc., Samsung Semiconductor, Inc. and Samsung Austin Semiconductor, L.P. 10.10+ Semiconductor Patent License Agreement, dated January 19, 2010, between Registrant and Samsung Electronics Co., Ltd. 10.11(9)* Employment Agreement between the Company and Luc Seraphin, dated as of October 25, 2018. 10.12(9)* Amended and Restated Change of Control Severance Agreement between the Company and Luc Seraphin, dated as of October 25, 2018. 10.13+ Settlement Agreement, dated June 11, 2013, among Registrant, SK hynix and certain SK hynix affiliates. 10.14+ Semiconductor Patent License Agreement, dated June 11, 2013, between Registrant and SK hynix. 10.15+ Settlement Agreement, dated December 9, 2013, between Rambus Inc., Micron Technology, Inc., and certain Micron affiliates. 10.16+ Semiconductor Patent License Agreement, dated December 9, 2013, between Rambus, Inc. and Micron Technology, Inc. 10.17+ Amendment to Semiconductor Patent License Agreement, dated December 30, 2013, by and between Rambus Inc. and Samsung Electronics Co., Ltd. 10.18+ Amendment 1 to Semiconductor Patent License Agreement, dated June 17, 2015, by and between Rambus Inc. and SK hynix Inc. 10.19(10) Lease agreement between Rambus Inc. and 237 North First Street Holdings, LLC dated July 8, 2019. 10.20(11)* Offer Letter, dated August 9, 2019, by and between Rambus Inc. and Sean Fan. 10.21(11)* 2019 Inducement Equity Incentive Plan. 10.22(11)* Form of Restricted Stock Unit Agreement (2019 Inducement Equity Incentive Plan). 10.23(11)* Form of Performance Based Restricted Stock Unit Agreement (2019 Inducement Equity Incentive Plan). 10.24(12) First Amendment to Net Lease Agreement dated April 22, 2020 relating to the New San Jose Headquarters Location between Rambus Inc. and 237 North First Street Holdings, LLC. 10.25(13)+ Amendment No. 1 to Semiconductor Patent License Agreement, dated September 2, 2020, between Rambus, Inc. and Micron Technology, Inc. 10.26(14)+ Amendment No. 2 dated December 15, 2020, to the Semiconductor Patent License Agreement between Rambus Inc. and Micron Technology, Inc. 10.27(15)+ Amendment No. 2 dated October 27, 2022, to the Semiconductor Patent License Agreement, dated January 19, 2010, between Registrant and Samsung Electronics Co., Ltd. 10.28(16)+ Amendment 2 to Semiconductor Patent License Agreement, dated March 31, 2023, between Registrant and SK hynix. 10.29+ Amendment 3 to Semiconductor Patent License Agreement, dated December 10, 2024, between Registrant and Micron Technology, Inc. 19.1 Insider Trading Policy . 21.1 Subsidiaries of Registrant. 23.1 Consent of KPMG LLP, Independent Registered Public Accounting Firm. 92 Exhibit Number Description of Document 23.2 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. 24.1 Power of Attorney (included on the signature page to this A nnual Report on Form 10- K ) . 31.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1† Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Compensation Recovery Policy, as adopted on July 27, 2023. 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) ______________________________________ * Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate. + Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). † The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. (1) Incorporated by reference to the Form 8-K filed on May 2, 2023. (2) Incorporated by reference to the Form S-1/A (file no. 333-22885) filed on April 24, 1997. (3) Incorporated by reference to the Form 10-K filed on February 23, 2024. (4) Incorporated by reference to the Form 10-Q filed on May 7, 2021. (5) Incorporated by reference to the Form 8-K filed on March 9, 2015. (6) Incorporated by reference to the Form 8-K filed on April 30, 2014. (7) Incorporated by reference to the Form 10-Q filed on July 23, 2015. (8) Incorporated by reference to the Form 8-K filed on May 6, 2020. (9) Incorporated by reference to the Form 8-K filed on October 29, 2018. (10) Incorporated by reference to the Form 10-Q filed on August 2, 2019. (11) Incorporated by reference to the Form 8-K filed on August 28, 2019. (12) Incorporated by reference to the Form 10-Q filed on August 7, 2020. (13) Incorporated by reference to the Form 10-Q filed on November 6, 2020. (14) Incorporated by reference to the Form 10-K filed on February 26, 2021. (15) Incorporated by reference to the Form 10-K filed on February 24, 2023. (16) Incorporated by reference to the Form 10-Q filed on May 5, 2023. 93 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RAMBUS INC. By: /s/ Desmond Lynch Desmond Lynch Senior Vice President, Finance and Chief Financial Officer (Principal Financial Officer) Date: February 24, 2025 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Luc Seraphin, Desmond Lynch and John Shinn as his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments to this Annual Report on Form 10-K, together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith and (iii) take any and all actions that may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 94 Signature Title Date /s/ LUC SERAPHIN Chief Executive Officer, President and Director (Principal Executive Officer) February 24, 2025 Luc Seraphin /s/ DESMOND LYNCH Senior Vice President, Finance and Chief Financial Officer (Principal Financial Officer) February 24, 2025 Desmond Lynch /s/ JOHN ALLEN Vice President, Accounting and Chief Accounting Officer (Principal Accounting Officer) February 24, 2025 John Allen /s/ CHARLES KISSNER Chairman of the Board of Directors February 24, 2025 Charles Kissner /s/ EMIKO HIGASHI Director February 24, 2025 Emiko Higashi /s/ STEVEN LAUB Director February 24, 2025 Steven Laub /s/ MEERA RAO Director February 24, 2025 Meera Rao /s/ NECIP SAYINER Director February 24, 2025 Necip Sayiner /s/ ERIC STANG Director February 24, 2025 Eric Stang 95