Rambus Inc. (RMBS), the technology licensing company run by CEO Ron Black, posted a 97% drop in net income in the third quarter of 2016 driven by a comparison with a year ago quarter in which it had a $167 tax benefit and higher expenses.
Sunnyvale, California-based Rambus said its third quarter net income fell to $4.5 million, or 4 cents a share, compared with $182 million, or $1.52, a a year ago when the company enjoyed the tax benefit.
The company’s operating income fell to $8.8 million from $15.1 million.
The company’s revenue rose 21.8% to $89.9 million from $73.8 million. The figures were helped by a tripling of contract and other revenue, which rose to $21.6 million from $7 million. Royalties rose to $68.3 million from $66.8 million.
Operating costs increased 38.8% to $78.04 million from $56.2 million. Cost of revenue rose 72% to $19.1 million from $11.1 million; research and development rose 21.6% to $33.8 million from $27.8 million. Sales, general and administrative costs also rose 38.5% to $24.8 million from $17.9 million.
Black said in a statement that the results for the third quarter came “with a general uptick across our business showcasing growth, both organically and inorganically, to support our strategy and plan.”
He noted that Rambus’s “licensing program continues to be strong with the signing of FPGA-leader Xilinx, which expands our footprint beyond DRAM and SoC sectors. We've also seen strong support in our security business within the mobile payments segment and believe we are well positioned to advance this technology further. We have steadily grown the business in terms of revenue, technologies, offerings and relevance, and expect a strong finish to the year.”
In other news, the company announced that it licensed its Differential Power Analysis countermeasures technology to NVIDIA (NVDA), the pioneer of GPU-accelerated computing, for an undisclosed amount.
DPA countermeasures, developed by Rambus Cryptography Research, consist of a broad range of software, hardware, and protocol techniques that protect devices. DPA is a type of side-channel attack that monitors variations in the electrical power consumption or electro-magnetic emissions from a target device. These measurements can be used to obtain cryptographic keys and other sensitive information from semiconductors and devices.
Shares of Rambus gained 37 cents or 3.18% to $11.99 in trading today. They’ve traded between $10.10 and $14.50 over the past year. After hours, the shares gained another 80 cents, or 6.67% to $12.79.
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