RMBS 10-K & 10-Q changes, risk factors and insider trading

•We have traditionally operated in, and may enter other, industries that are highly cyclical and competitive.

•Much of our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations, acquisitions or other means, our revenue may decrease substantially.

•Products that fail to meet their specifications or are defective could impose significant costs on us or result in loss of business.

•We may not be successful with new product introductions and/or expanding into new markets.

•If we do not keep pace with technological innovations or customers’ increasing technological requirements, we may not be able to enhance our existing products andproducts, our products may not be competitive,competitive and our revenue and operating results may suffer.

•If our customers do not incorporate our technologies into their products, or if our customers’ products are not commercially successful, our business would suffer.

•We purchase inventory in advance based on expected demand for our products, and if demand is not as expected, we may have insufficient or excess inventory, which could adversely impact our financial condition.

•Our business is dependent on distributors to service our end customers.

•A meaningful portion of our future revenue depends on sustaining or growing our licensing revenue and the failure to achieve such revenue would lead to a material decline in our results of operations.

•Our licensing cycle is lengthy and costly, and our marketing and licensing efforts may be unsuccessful.

•Some of our license agreements may convert from royalty generating to fully paid-up licenses at the expiration of their terms,terms or upon certain milestones, and we may not receive royalties after that time.

•Future revenue is difficult to predict for several reasons, and our failure to predict revenue or revenue trends accurately may result in our stock price declining.

•We may fail to meet our publicly announced guidance or other expectations about our business, which would likely cause our stock price to decline.

•A substantial portion of our revenue is derived from sources outside of the United States and this revenue and our business generally are subject to risks related to international operations that are often beyond our control.

•Weak global economic conditionsconditions, including as a result of tariffs or trade restrictions and relationships, may adversely affect demand for the products and services of our customers and could otherwise harm our business.

•Our operations are subject to the effects of inflation.

•We rely on third parties for a variety of services, including manufacturing, and these third parties’ failure to perform these services adequately or change our allocation of their services/capacity due to industry or other pressures could materially and adversely affect our business.

•Our business and operations could suffer in the event of physical and cybersecurity breaches and incidents.

•We have in the past made and may in the future make acquisitions or enter into mergers, strategic investments, sales of assets, divestitures or other arrangements that may not produce expected operational benefits or operating and financial results.

•If we are unable to attract and retain qualified personnel globally, our business and operations could suffer.

•Our operations are subject to risks of natural disasters, acts of war, terrorism, widespread illness or security breaches or incidents at our domestic and international locations, any one of which could result in a business stoppage and negatively affect our operating results.

•Unanticipated changes in our tax rates or in the tax laws, treaties and regulations could expose us to additional income tax liabilities, which could affect our operating results and financial condition.

•We are subject to various government restrictions and regulations, including on the sale of products and services that use encryption and other technology, those related to privacy, other consumer protection matters, other import/export controls and national security matters.

•Litigation and government proceedings could affect our business in materially negative ways.

•If we are unable to protect our inventions successfully through the issuance and enforcement of patents, our operating results could be adversely affected.

•Third parties may claim that our products or services infringe on their intellectual property (“IP”) rights, exposing us to litigation that, regardless of merit, may be costly to defend.

•Warranty, service level agreement and product liability claims brought against us could cause us to incur significant costs and adversely affect our operating results, as well as our reputation and relationships with customers.

•Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Our target customers are companies that develop and market high volume business and consumer products in semiconductors, computing, data centers, networks, artificial intelligence (“AI”), tablets, handheld devices, mobile applications, gaming and graphics, high-definition televisions, cryptography and data security. The electronics industry is intensely competitive and has been impacted by rapid technological change, short product life cycles, cyclical market patterns, price erosion and increasing foreign and domestic competition. We are subject to many risks beyond our control that influence whether or not we are successful in winning target customers or retaining existing customers, including, primarily, competition in a particular industry, market acceptance of such customers’ products and the financial resources of such customers. In particular, DRAM manufacturers, which make up a significant part of our revenue, are prone to significant business cycles and have suffered material losses and other adverse effects to their businesses, leading to industry consolidation from time-to-time that may result in loss of revenue under our existing license agreements or loss of target customers. AsAdditionally, AI has been developing at a rapid pace and continues to evolve and change, especially with robust growth for AI infrastructure. We cannot predict whether the demand for AI solutions and therefore the demand for our products that support the AI ecosystem and infrastructure will continue and at what pace. The adoption of AI solutions by our customers and/or their end users may not develop in the manner or in the time periods we anticipate and, as the markets for AI solutions are still developing, demand for our products that support AI may be unpredictable and vary significantly from one period to another. If we are unable to predict the demand for AI or if we overestimate the demand for our products as a result of AI, our business may be adversely impacted. Furthermore, as a result of ongoing competition in the industries in which we operate and volatility in various economies around the world, we may achieve reduced market share, a reduced number of licenses or may experience tightening of customers’ operating budgets, difficulty or inability of our customers to pay our licensing fees, reduction in downstream demand, lengthening of the approval process for new products and licenses and consolidation among our customers. All of these factors may adversely affect the demand for our products and technologies and may cause us to experience substantial fluctuations in our operating results and financial condition.

We face competition from semiconductor and digital electronics products and systems companies, and other semiconductor IP companies that provide security and interface IP that are available to the market. We believe some of the competition for our technologies may come from our prospective customers, some of which are internally evaluating and developing products based on technologies that they contend or may contend will not require a license from us. Many of these companies are larger and may have better access to financial, technical and other resources than we possess and may be able to develop and advance competitive products more effectively.effectively, including through the use of AI.

We have a high degree of revenue concentration. Our top five customers for each reporting period represented approximately 66% of our consolidated revenue for the year ended December 31, 2025 and 62% of our consolidated revenue for both the years ended December 31, 2024 and 2023 and 58% of our consolidated revenue for the year ended December 31, 2022.2023. We expect to continue to experience significant revenue concentration for the foreseeable future. Our customers’ demand for our products may fluctuate due to factors beyond our control. We could experience fluctuations in our customer base or the mix of revenue by customer as markets and strategies evolve. A disruption in our relationship with any of our customers could adversely affect our business. In addition, any consolidation of our customers could reduce the number of customers to whom our products may be sold or the demand for our products. Our inability to meet our customers’ requirements or to qualify our products with them could adversely impact our revenue. The loss of, or restrictions on our ability to sell to, one or more of our major customers or any significant reduction in orders from, or a shift in product mix by customers, could have a material adverse effect on our operating results and financial condition.

In addition, our license agreements are complex and some contain terms that require us to provide certain customers with the lowest royalty rate that we provide to other customers for similar technologies, volumes and schedules. These clauses may limit our ability to effectively price differently among our customers, to respond quickly to market forces,forces or otherwise to compete on the basis of price. These clauses may also require us to reduce royalties payable by existing customers when we enter into or amend agreements with other customers. Any adjustment that reduces royalties from current customers or licensees may have a material adverse effect on our operating results and financial condition.

Products that do not meet their specifications or that contain, or are perceived by our customers to contain, defects could impose significant costs on us or otherwise materially adversely affect our operating results and financial condition. From time to time, we experience problems with nonconforming, defective,defective or incompatible products after we have shipped such products. In recent periods, we have further expanded our product offerings, which could potentially increase the chance that one or more of our products could fail to meet specifications in a particular application. Our products and technologies may be deemed fully or partially responsible for functionality in our customers’ products and may result in sharing or shifting of product or financial liability from our customers to us for costs incurred by the end user as a result of our customers’ products failing to perform as specified. In addition, if our products and technologies perform critical functions in our customers’ products or are used in high-risk consumer end products, such as automotive products, our potential liability may increase. We could be adversely affected in several ways, including the following:

•we may be required or agree to compensate customers for costs incurred or damages caused by defective or incompatible products and to replace products;

•we could incur a decrease in revenue or adjustment to pricing commensurate with the reimbursement of such costs or alleged damages;

•we may encounter adverse publicity, which could cause a decrease in sales of our products or harm our reputation or relationships with existing or potential customers; and our customers may reduce or cancel their orders with us or exclude us from further consideration as a supplier.

Our ability to generate significant revenue from new markets will depend on various factors, including the development and growth of these markets; the ability of our technologies and products to address the needs of these markets; the price and performance requirements of our customers,customers and the preferences of end users; and our ability to provide our customers with products that provide advantages compared with alternative products.

If we do not keep pace with technological innovations or customers’ increasing technological requirements, we may not be able to enhance our existing products andproducts, our products may not be competitive,competitive and our revenue and operating results may suffer.

Our research and development efforts with respect to new technologies may not result in customer or market acceptance. Some or all of those technologies may not successfully make the transition from the research and development stage to cost-effective production as a result of technology problems, competitive cost issues, yield problems,problems and other factors. Even if we successfully complete a research and development effort with respect to a particular technology, our customers may decide not to introduce or may terminate products utilizing the technology for a variety of reasons, including difficulties with other suppliers of components for the products, superior technologies developed by our competitors and unfavorable comparisons of our products with these technologies, price considerations and lack of anticipated or actual market demand for the products.

Our business model continues to transform towards greater reliance on product revenue. We could experience a slowdown in our customers’ demand for our products in the near termterm, including if we or our customers overestimate the demand for AI-based solutions in the future; however, we anticipate our memory interface chips will contribute to continued long-term growth. If sales of our memory interface chips do not grow as anticipated, then our business could suffer as a result. Our business could be harmed if we are unable to develop and utilize new technologies that address the needs of our customers, or our competitors or customers develop and utilize new technologiestechnologies, including AI, more effectively or more quickly than we can. A transition by our customers to different business models could also result in reduced revenue. We cannot guarantee that we will be successful in keeping pace with all, or any, of the customer trends. Any investments made to enhance or develop new technologies that are not successful could have an adverse effect on our operating results and financial condition.

As a fabless semiconductor company, we purchase our inventory from third-party manufacturers in advance of selling our products. We place orders with our manufacturers based on existing and expected orders from our customers and distributors for particular products. We are also subject to increased inventory risks and costs because we build our products based on forecasts provided by our customers and distributors before receiving purchase orders for the product. While most of our contracts with our customers and distributors include lead time requirements and cancellation penalties that are designed to protect us from misalignment between orders and inventory levels, we must nonetheless make some predictions when we place orders with our manufacturers and we are not always able to make adjustments to align with our inventory needs. Our customers and distributors may also fail to place orders or cancel orders for many reasons, including but not limited to trends in the global economy, including as a result of tariffs or trade restrictions or relationships, business challenges, supply chain constraints, longer than expected inventory digestion or other changes in their business requirements. In the event that our predictions are inaccurate due to unexpected increases in orders or our manufacturers are unable to provide the inventory that we require, we may have insufficient inventory to meet our customers’ and distributors’ demands. In addition, a perceived negative trend in market conditions could lead us to decrease the manufacturing volume of our products to avoid excess inventory. If we inaccurately assess market conditions for our products, we could have insufficient inventory to meet the demands of our customers and distributors, resulting in loss of revenue. In the event that we order products that we are unable to sell due to a decrease in orders, unexpected order cancellations, import/export restrictions or product returns, we may have excess inventory which, if not sold, may need to be written down or would result in a decrease in our revenue in future periods. If any of these situations were to arise, it could have a material impact on our business, financial condition and results of operations.

The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or decreased rapidly. For example, we are currently experiencing increased demand for our products that is attributed to increased demand for AI-based solutions. If we overbuild inventory in a period of decreased demand, or if we expand our operations too rapidly or procure excessive resources in anticipation of increased demand for our products, including in relation to AI, and that demand does not materialize at the pace at which we expect, or declines, our operating results may be adversely affected as a result of charges related to obsolete inventory, inventory write-downs, increased operating expenses or reduced margins.

We utilize distributors to sell our memory interface chips to certain customers. We do not have long-term purchase commitments from our distributors. If a key distributor were to experience financial difficulties, including bankruptcy, this could materially impact our financial results due to potential losses from uncollectible receivables. Additionally, any oversupply of inventory at our distributors, whether due to an industry or economic downturn or other causes, could result in reduced sales in a given period, increased order push-outs, increased inventory returns and cause us to carry higher levels of inventory. This could result in us incurring charges for obsolete or excess inventory, or we may not fully recover our costs, which would reduce our gross margin. Violations of the Foreign Corrupt Practices Act,Act of 1977, as amended (the “FCPA”), export controls and sanction laws, or similar laws, by our distributors could also have a material adverse impact on our business.

While our business model continues to transform towards greater reliance on product revenue, a large portion of our revenue still consists of fees paid for access to our patented technologies, existing technology and other development and support services we provide to our customers. Our ability to secure and renew the licenses from which that revenue is derived depends on our customers adopting our technology and using it in the products they sell. If customers do not upgrade or enhance their product offerings to include such technologies, our revenue and operating results may be adversely affected. Once secured, license revenue may be negatively affected by factors within and outside our control, including reductions in our customers’ sales prices, sales volumes, our failure to timely complete any engineering deliverables and the actual terms of such licenses themselves. In addition, our licensing cycle for new licensees, as well as for renewals for existing licensees is lengthy, costly and unpredictable. We cannot provide any assurance that we will be successful in signing new license agreements or renewing existing license agreements on equal or favorable terms or at all. If we do not achieve our revenue goals, our results of operations could decline.

Some of our license agreements may convert from royalty generating to fully paid-up licenses at the expiration of their terms,terms or upon certain milestones, and we may not receive royalties after that time.

In addition, while some of our license agreements provide for fixed, quarterlyfixed royalty payments, many of our license agreements provide for volume-based royalties and may also be subject to caps on royalties or other adjustments in a given period. The sales volume and prices of our customers’ products in any given period can be difficult to predict.

Because we provide memory interface chips, among others, that are used in end products and systems, demand for our products is influenced by the demand for end products sold by our customers or via distributors. For example, we are currently experiencing increased demand for our products that is attributed to an increased demand for AI-based solutions, but we cannot predict future trends in such demand. As a result, we may have difficulty in accurately forecasting our product revenue. Our product revenue depends on the timing, scale,scale and speed of introductions of new end products and systems, as well as the ongoing demand for existing end products and systems, that incorporate our products, all of which are intrinsically difficult to forecast. In addition, demand for our products is influenced by the ability of our customers and distributors to manage their inventory. If our customers and distributors do not manage their inventory correctly or misjudge their customers’ demand, our shipments to and orders from our customers and distributors may vary significantly, and we may have difficulty forecasting our inventory levels, which could reduce our product revenue, result in inventory write offs,offs and adversely affect our financial condition and results of operations. For these reasons, our actual results may differ substantially from analyst estimates or our forecasts in any given quarter.

To the extent that customer sales are not denominated in U.S. dollars, any royalties that are based on a percentage of the customers’ sales and which we receive as a result of such sales could be subject to fluctuations in currency exchange rates. In addition, if the effective price of licensed products sold by our foreign customers were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for licensed products could fall, which in turn would reduce our royalties. From time to time, we use limited financial instruments to hedge foreign exchange rate risk, however such instruments may not be sufficient to cover such risk.

Trade-related government actions, including changes in trade restrictions or relationships, tariffs and exchange controls, and potential retaliatory tariffs or actions by other countries, whether implemented by the United States, China, the European Union or other countries, that impose barriers or restrictions impacting our ability to sell or ship products to certain customers may have a negative impact on our financial condition and results of operations. We cannot predict the actions government entities may take in this context and may be unable to quickly offset or effectively react to government actions that restrict our ability to sell to certain customers or in certain jurisdictions. Government actions that affect our customers’ ability to sell products or access critical elements of their supply chains may result in a decreased demand for their products, which may consequently reduce their demand for our products.

We currently have international business, business development,development and design operations in Bulgaria, Canada, China, Finland, France, India, the Netherlands, South Korea,Korea and Taiwan. Our international operations and revenue are subject to a variety of risks that are beyond our control, including:

•hiring, maintaining and managing a workforce and facilities remotely and under various legal systems, including compliance with local labor and employment laws;

•non-compliance with our code of conduct or other corporate policies;

•compliance with and international laws involving international operations, including the Foreign Corrupt Practices Act of 1977, as amended,FCPA, sanctions and anti-corruption laws, export and import laws and similar rules and regulations;

•natural disasters, acts of war, terrorism, widespread global pandemics or illness, such as COVID-19 and its variants, or security breaches or incidents;

•export controls, tariffs, import and licensing restrictions, climate-change regulations and other trade barriers;

•profits, if any, earned abroad being subject to local tax laws and not being repatriated to the United States or, if repatriation is possible, limited in amount;

•adverse tax treatment of revenue from international sources and changes to tax laws and regulations, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions;

•longer payment cycles and greater difficulty in collecting accounts receivable;

As a pioneer with nearlyover 35three yearsdecades of advanced semiconductor design experience, Rambus is at the forefront of enabling the next era of AI-driven computing, addressing the critical challenges of acceleratingsignal and securingpower integrity at increasingly extreme data movementrates in the data center, edge,edge and client markets. We are a leader in high-performance memory subsystems, offering a balanced and diverse portfolio of productsproducts, encompassing chipsIP and siliconpatents IP. Focusing primarily on the data center, our innovative solutionsthat maximize performance and security in computationally intensive systems.

Rambus is uniquelywell positioned to address thisthese challenge.challenges. OurLeveraging our deep expertise in memory technologiestechnology and innovative architecturesarchitectures, enables us to deliver solutions that break through the memory wall. Wewe provide industry-leading memory interface chips that enable the highest bandwidthbandwidth, capacity and capacitypower efficient server memory modules, maximizing memory performance and reliability for the most demanding data-intensive workloads. TheseBeyond solutionsthe data center, server-class technologies are essentialwaterfalling forinto supportingclient thedevices trainingto andbring inferencethese ofsame increasinglybenefits complexto end-user systems, such as AI models,personal includingcomputers those used in generative AI applications.(“PCs”).

Our continued execution delivered strong results during fiscal year 2024,2025, driven by continuedincreased demand for our memory interface chips and our Silicon IP solutions, and stability from our royalties revenue.

•Revenue of $556.6$707.6 million;

•Operating expenses of $263.5$303.0 million;

•Diluted net income per share of $1.65$2.11; and

•Net cash provided by operating activities of $230.6$360.0 million.

We generateddelivered record product revenue of $246.8$347.8 million in 20242025 which increased by approximately 10%41% as compared to 2023.2024. We also generated record cash provided by operating activities of $230.6$360.0 million in 2024.2025. We continueddelivered strong execution across our productmemory portfolioand expansioninterface withportfolio. We strengthened our leadership in DDR5 RCD and expanded the introductionadoption of our DDR5new serverproducts. PMICs,We Clientalso Clockexpanded Driver,into high-performance and AI PCs through the launch of our complete client chipset. In addition, we achieved strong customer momentum across our HBM4, GDDR7, and PCIe 7.0 digital IP families, as well as HBM4,our GDDR7security andIP, PCIereinforcing 7our IPposition solutions.as Ina addition,key weenabler unveiledof industry-first complete chipsets for next-generation, industry-standard DDR5 MRDIMMs and RDIMMs for thenext-generation data center and AI.AI Furthermore,architectures. Finally, further fueling our continuous technology investment, we successfully secured and extended key patent licensing agreements, providing a strong foundation for sustained cash generation and consistent return of value to our comprehensive patent license agreement with Micron by five years through 2029.stockholders.

The Company’s consolidated revenue is comprised of product revenue, royalties, and contract and other revenue and royalties.revenue.

RoyaltyRoyalties revenue is primarily derived from our patent licenses, through which we provide our customers certain rights to our broad worldwide portfolio of patented inventions. Our patent licenses enable our customers to use a portion of our patent portfolio in their own digital electronics products. The licenses typically range in duration up to ten years and may define the specific field of use where our customers may utilize our inventions in their products. Royalties may be structured as fixed, variable or a hybrid of fixed and variable royalty payments. Leading semiconductor and electronic system companies such as AMD, Amlogic, Broadcom, CXMT, IBM, Infineon, Kioxia, Marvell, MediaTek, Micron, Nanya, Nuvoton, NVIDIA, Phison, Qualcomm, Samsung, Silicon Motion, SK hynix, Socionext, STMicroelectronics, Toshiba, Western Digital,Digital and Winbond have licensed our patents. The vast majority of our patents originate from our internal research and development efforts. Additionally, from time to time, we enter into agreements to sell certain patent assets under agreements which may also include subsequent profit-sharing. The sale of these patents, as well as the subsequent profit-sharing, are included as part of our royaltyroyalties revenue. Revenue from royalties accounted for 41%,40%, 32%41% and 31%32% of our consolidated revenue for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively.

Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $11.4$38.8 million for the year ended December 31, 20242025 as compared to 2023,2024, primarily due to higher sales volumes of our memory interface chips.

Total research and development expenses increased approximately $6.1$24.8 million for the year ended December 31, 20242025 as compared to 2023.2024. The fluctuationincrease was primarily driven by growthcontinued investment in our research and development initiatives,initiatives offset by decreases attributable to the sale of our PHY IP group in the third quarter of 2023. The increase wasand primarily duereflected to increases in prototyping costs of $4.4 million, allocated facility expenses of $2.5 million,higher headcount-related expenses of $2.2$18.9 million,million and stock-based compensation expense of $1.5 million, as well as lower engineering costs allocated to cost of revenue of $2.4 million, offset by decreases in software EDA tool subscriptions of $4.9 million, consulting expenses of $0.7 million, retention bonus expense related to acquisitions of $0.7 million and depreciation expenses of $0.5$4.3 million.

Total sales, general and administrative costs decreasedincreased approximately $4.0$11.2 million for the year ended December 31, 20242025 as compared to 2023,2024. The increase was primarily duedriven toby lowerhigher rent and facilityheadcount-related expenses allocatedof to$6.6 sales, generalmillion and administrative expense of $3.8 million, stock-based compensation expense of $1.6$4.9 million,million. accountingDepreciation andexpense auditalso feesincreased of $1.0$1.1 million, and acquisition-relatedsales costsand (includingmarketing retentionactivities bonus expenses) ofincreased $0.8 million,million. These increases were partially offset by increasesa $2.2 million decrease in consulting expense of $1.4 million, headcount-related expenses of $1.0 million, and legal expenses of $0.7 million.expense.

There are a number of trends that may have a material impact on us in the future, including but not limited to, the evolution of memory technology, adoption of security solutions, the use and adoption of our inventions or technologies generally, industry consolidation and global economic conditions with the resulting impact on sales of consumer electronic systems. Additionally, there is ongoing uncertainty and volatility in future revenue and costs due to various macroeconomic events, such as tariffs and global inflation, which could have a significant impact on our business and operating results.

We have a high degree of revenue concentration. Our top five customers represented 62%66% of our revenue forin 2025 and 62% in both 2024 and 20232023. The level of concentration and 58% in 2022. The particular customers which account for revenuethis concentration have varied fromin period-to-periodthe past and may vary in the future as a result of thedemand additionfor our semiconductor products, timing of new contracts, expiration of existing contracts, renewalsas well as timing of existingcontract contracts,expirations and renewals, industry consolidation and the volumes and prices at which the customers have recently sold to their customers. These variations are expected to continue in the foreseeable future.

The royalties we receive from our semiconductor customers are partly a function of the adoption of our technologies by system companies. Many system companies purchase semiconductors containing our technologies from our customers and do not have a direct contractual relationship with us. Our customers generally do not provide us with details as to the identity or volume of licensed semiconductors purchased by particular system companies. As a result, we face difficulty in analyzing the extent to which our future revenue will be dependent upon particular system companies. Several of our licensees have renewed or extended their license agreements with us during the year ended December 31, 2024, including Kioxia, Marvell, Micron and Nanya.

As a part of our overall business strategy, we evaluate businesses and technologies for potential acquisitions that are aligned with our core business and designed to supplement our growth, including the acquisition of Hardent in the second quarter of 2022.growth. Similarly, we evaluate our current businesses and technologies that are not aligned with our core business for potential divestiture, such as the sale of our PHY IP group to Cadence in the third quarter of 2023.divestitures. We expect to continue to evaluate and potentially enter into strategic acquisitions or divestitures which will impact our business and operating results.

The following table sets forth, for the periods indicated, the percentage of total revenue represented by certain items reflected in our consolidated statements of operationsincome:

Product revenue consists primarily of revenue from the sale of memory andproducts. securityProduct products.revenue increased by approximately $101.0 million for the year ended December 31, 2025 as compared to 2024. Product revenue increased by approximately $22.2 million for the year ended December 31, 2024 as compared to 2023,2023. primarilyThe increases were due to higher sales of our memory interface chips. Product revenue declined modestly by approximately $2.5 million for the year ended December 31, 2023chips, as comparedwell toas 2022contributions infrom anew market that declined during the period.products.

Growth in our product revenue is dependent on, among other things, the industry transition to a new generation of memory, as well as our ability to continue to obtain orders from customers, develop and sell new products, maintain adequate supply in order to meet our customers’ demandsdemand and mitigate any supply chain and economic disruption.

RoyaltyRoyalties revenue, which includes patent and technology license royalties, increased approximately $53.2 million for the year ended December 31, 2025 as compared to 2024. Royalties revenue increased approximately $76.1 million for the year ended December 31, 2024 as compared to 2023. Royalty revenue increased approximately $10.3 million for the year ended December 31, 2023 as compared to 2022. The increases were primarily due to the timing and structure of license renewalsagreements forand both periods.renewals.

We are continuously in negotiations for licenses with prospective customers. We expect royaltyroyalties revenue will continue to vary from period to period based on our success in adding new customers, renewing or extending existing agreements, as well as the level of variation in our customers’ reported shipment volumes, sales price and product mix, offset in part by the proportion of customer payments that are fixed or hybrid in nature.

Contract and other revenue consists of revenue from technology development projects. Contract and other revenue decreased approximately $3.2 million for the year ended December 31, 2025 as compared to 2024, due to lower revenue associated with our Silicon IP offerings. Contract and other revenue decreased approximately $2.8 million for the year ended December 31, 2024 as compared to 2023. Contract and other revenue decreased approximately $1.5 million for the year ended December 31, 2023 as compared to 2022. The decreases for both periods were2023, primarily attributed to the sale of our PHY IP group in the third quarter of 2023.

Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $38.8 million for the year ended December 31, 2025 as compared to 2024. Cost of product revenue increased approximately $11.4 million for the year ended December 31, 2024 as compared to 2023,2023. The increases were primarily due to higher sales volumes of our memory interface chips. Cost of product revenue decreased approximately $4.5 million for the year ended December 31, 2023 as compared to 2022, primarily due to a change in product mix and lower product revenue.

Cost of contract and other revenue reflects the portion of the total engineering costs which are specifically devoted to individual customer development and support services. Cost of contract and other revenue remained relatively flat for the year ended December 31, 2025 as compared to 2024. Cost of contract and other revenue decreased approximately $2.4 million for the year ended December 31, 2024 as compared to 2023, primarily due to lower engineering services associated with the contracts and the sale of our PHY IP group in the third quarter of 2023. Cost of contract and other revenue increased approximately $0.7 million for the year ended December 31, 2023 as compared to 2022, primarily due to higher engineering services associated with the contracts.

Total sales, general and administrative costs decreasedincreased approximately $4.0$11.2 million for the year ended December 31, 20242025 as compared to 2023,2024. The increase was primarily duedriven toby lowerhigher rent and facility expenses allocated to sales, general and administrativeheadcount-related expenses of $3.8$6.6 million,million and stock-based compensation expense of $1.6$4.9 million,million. accountingDepreciation andexpense auditalso feesincreased of $1.0$1.1 million, and acquisition-relatedsales costsand (includingmarketing retentionactivities bonus expenses) ofincreased $0.8 million,million. These increases were partially offset by increasesa $2.2 million decrease in consulting expense of $1.4 million, headcount-related expenses of $1.0 million, and legal expenses of $0.7 million.expense.

Total sales, general and administrative costs increaseddecreased approximately $1.4$4.0 million for the year ended December 31, 20232024 as compared to 2022,2023, primarily due to increaseslower inrent and facility expenses allocated to sales, general and administrative expenses of $3.8 million, stock-based compensation expense of $8.0$1.6 million andmillion, accounting and audit fees of $0.6$1.0 million and acquisition-related costs (including retention bonus expenses) of $0.8 million, offset by decreasesincreases in acquisition-relatedconsulting costsexpense of $3.7$1.4 million, bonus expense related to acquisitions of $1.7 million, rent and facilityheadcount-related expenses of $1.1$1.0 million and recruitinglegal expenseexpenses of $0.6$0.7 million.

In the future, sales, general and administrative expenses will vary from period to period based on the trade shows, advertising, legal, acquisition and other sales, marketing and administrative activities undertaken, and the change in sales, marketing and administrative headcount in any given period. In the near term, we expect our sales, general and administrative expenses to remain relatively flat.

Total amortization of acquired intangible assets decreased approximately $0.9$4.8 million for the year ended December 31, 20232025 as compared to 2022.2024. InTotal amortization of acquired intangible assets decreased approximately $3.0 million for the thirdyear quarterended ofDecember 2023,31, we divested our PHY IP group and2024 as acompared result,to we2023. disposedThe ofdecreases approximatelyin $7.4both millionperiods ofwere netprimarily due to certain intangible assets,assets whichbeing reducedfully our amortization expense in future periods.amortized. Refer to Note 6, “Intangible AssetsAssets, and Goodwill,Net” of Notes to Consolidated Financial Statements of this Form 10-K for additional information.

During the year ended December 31, 2024, we recorded a charge of approximately $1.1 million in our Consolidated StatementsStatement of OperationsIncome of this Form 10-K, related to the write-off of certain fixed assets no longer in use and for which we determined they had no alternate economic use.

Concurrent with the sale of our PHY IP group to Cadence, we recorded a charge of approximately $10.0 million in our Consolidated StatementsStatement of OperationsIncome for 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, but where acceleration was warranted due to the lower headcount and corresponding excess capacity for such licenses. Refer to Note 20, “Divestiture,” of Notes to Consolidated Financial Statements of this Form 10-K for additional information.

During the years ended December 31, 2024, 20232024 and 2022,2023, we remeasured the fair value of the earn-out liability, which resulted in a reduction of $5.0 million and additional expensesexpense of $9.2 million and $3.1 million, respectively, in our Consolidated Statements of OperationsIncome of this Form 10-K. The final earn-out was achieved asin the third quarter of September 30, 2024 and was fully paid during the fourth quarter of 2024.

Interest income and other income (expense), net, includes interest income from our investment portfolio and from the significant financing component of licensing agreements, as well as any gains or losses from the re-measurement of our monetary assets or liabilities denominated in foreign currencies. For the years ended December 31, 2024,2025, 20232024 and 2022,2023, interest income and other income (expense), net, consisted primarily of interest income from our investment portfolio of $18.5 million, $10.6 million and $1.0 million, respectively, as well as interest income from the significant financing component of licensing agreements of $0.5 million, $2.2 million and $5.6 million, respectively.portfolio.

We made an investment in a non-marketable equity security of a private company in 2018. We accounted for this investment under the equity method of accounting and recorded our share of the income (loss). During the fourth quarter of 2023, we sold our 25% 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 our Consolidated Balance Sheet as of December 31, 2023. We recognized a net gain of approximately $23.9 million related to the sale in our Consolidated StatementsStatement of OperationsIncome for the year ended December 31, 2023 after offsetting $1.1 million of transaction costs from the $25.0 million selling price. Refer to Note 9, “Fair Value of Financial Instruments,” of Notes to Consolidated Financial Statements of this Form 10-K for additional information.

Interest expense remainedconsists relativelyprimarily flatof interest expense associated with long-term software licenses for the years ended December 31, 2024,2025, 20232024 and 2022.2023.

We recorded a provision for income taxes of $20.2$51.5 million for the year ended December 31, 2024,2025, which was primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2024,2025, including withholding taxes, offset by tax benefits from excess stock-based compensation deductionsdeductions, research and foreign-deriveddevelopment intangibletax credits and foreign tax credits. Our provision for income deductions.taxes for the year ended December 31, 2025 includes the impact from the tax legislation, referred to as the One Big Beautiful Bill Act (“OBBBA”), which was enacted in the third quarter of 2025 and is further discussed below. For the year ended December 31, 2024,2025, we paid withholding taxes of $20.6$22.0 million. We recorded a benefit from income taxes of $146.7 million for the year ended December 31, 2023, which was primarily driven by the $177.9 million valuation allowance release on our U.S. deferred tax assets, as well as tax benefits from excess stock-based compensation deductions. For the year ended December 31, 2023, we paid withholding taxes of $22.9 million.

Unanticipated changes in our tax rates or in the tax laws, treaties and/or regulations could expose us to additionalchanges incomein tax liabilities,rates or additional tax obligations, which could affect our operating resultsresults, financial condition and financialcash condition.flows.

Our target customers are companies that develop and market high volume business and consumer products in semiconductors, computing, data centers, networks, artificial intelligence (“AI”), tablets, handheld devices, mobile applications, gaming and graphics, high-definition televisions, cryptography and data security. The electronics industry is intensely competitive and has been impacted by rapid technological change, short product life cycles, cyclical market patterns, price erosion and increasing foreign and domestic competition. We are subject to many risks beyond our control that influence whether or not we are successful in winning target customers or retaining existing customers, including, primarily, competition in a particular industry, market acceptance of such customers’ products and the financial resources of such customers. In particular, DRAM manufacturers, which make up a significant part of our revenue, are prone to significant business cycles and have in the past suffered material losses and other adverse effects to their businesses, leading to industry consolidation from time to time that may result in loss of revenue under our existing license agreements or loss of target customers. Additionally, AI has been developing at a rapid pace and continues to evolve and change, especially with robust growth for AI infrastructure. We cannot predict whether the demand for AI solutions and therefore the demand for our products that support the AI ecosystem and infrastructure will continue and at what pace. The adoption of AI solutions by our customers and/or their end users may not develop in the manner or in the time periods we anticipate and, as the markets for AI solutions are still developing, demand for our products that support AI may be unpredictable and vary significantly from one period to another. If we are unable to predict the demand for AI or if we overestimate the demand for our products as a result of AI, our business may be adversely impacted. Furthermore, as a result of ongoing competition in the industries in which we operate and volatility in various economies around the world, we may achieve reduced market share, a reduced number of licenses or may experience tightening of customers’ operating budgets, difficulty or inability of our customers to pay our licensing fees, reduction in direct and/or downstream demand, lengthening of the approval process for new products and licenses and consolidation among our customers. All of these factors may adversely affect the demand for our products and technologies and may cause us to experience substantial fluctuations in our operating results and financial condition.

We have a high degree of revenue concentration. Our top five customers for each reporting period represented approximately 70%64% and 71%69% of our consolidated revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Additionally, our top five customers for each reporting period represented approximately 66% and 62% of our consolidated revenue for the years ended December 31, 2025 and 2024, respectively. We expect to continue to experience significant revenue concentration for the foreseeable future. Our customers’ demand for our products may fluctuate due to factors beyond our control. We could experience fluctuations in our customer base or the mix of revenue by customer as markets and strategies evolve. A disruption in our relationship with any of our customers could adversely affect our business. In addition, any consolidation of our customers could reduce the number of customers to whom our products may be sold or the demand for our products. Our inability to meet our customers’ requirements or to qualify our products with them could adversely impact our revenue. The loss of, or restrictions on our ability to sell to, one or more of our major customers or any significant reduction in orders from, or a shift in product mix by customers, could have a material adverse effect on our operating results and financial condition.

As we commercially launch each of our products, the sales volume of and resulting revenue from such products in any given period will be difficult to predict. OurAlso, our lengthy license negotiation cycles could make a considerable portion of our future revenue difficult to predict because we may not be successful in entering into or renewing licenses with our customers on our anticipated timelines.

Because we provide memory interface chips, among others,other products, that are used in end products and systems, demand for our products is influenced by the demand for end products sold by our customers or via distributors. For example, we are currently experiencing increased demand for our products that is attributed to an increased demand for AI-based solutions, but we cannot predict future trends in such demand. As a result, we may have difficulty in accurately forecasting our product revenue. Our product revenue depends on the timing, scale and speed of introductions of new end products and systems, as well as the ongoing demand for existing end products and systems, that incorporate our products, all of which are intrinsically difficult to forecast. In addition, demand for our products is influenced by the ability of our customers and distributors to manage their inventory. If our customers and distributors do not manage their inventory correctly or misjudge their customers’ demand, our shipments to and orders from our customers and distributors may vary significantly, and we may have difficulty forecasting our inventory levels, which could reduce our product revenue, result in inventory write-offs and adversely affect our financial condition and results of operations. For these reasons, our actual results may differ substantially from analyst estimates or our forecasts in any given quarter.

For the threesix months ended MarchJune 31,30, 2026 and 2025, revenue from our international customers constituted approximately 88%84% and 84%,82%, respectively, of our total consolidated revenue. Additionally, for the years ended December 31, 2025 and 2024, revenue from our international customers constituted approximately 82% and 64%, respectively, of our total consolidated revenue. We expect that future revenue derived from international sources will continue to represent a significant portion of our total revenue.

compliance with international laws involving international operations, including the FCPA, sanctions and anti-corruption laws, cybersecurity laws, export and import laws and similar rules and regulations;

geopolitical instability, including international conflict, war, and changes in diplomatic and trade relationships, in particular within ChinaAsia and(including China, Taiwan, and inSouth Korea), Europe, South Korea, Central and South America, Israel, Iran and the Middle East (including Israel and Iran);

Attempts by others to gain unauthorized access to and disrupt our information technology systems and IP assets are becoming more sophisticated. These attempts, which might be related to industrial or other espionage, may include (to Rambus, our customers and/or our third-party service providers), covertly introducing malware to our computers and networks and impersonating authorized users, phishing attempts and other forms of social engineering, employee or contractor malfeasance, denial of service attacks and ransomware attacks, among others. We seek to detect and investigate all security incidents impacting our systems and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. We also utilize third-party service providers to host, transmit or otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications. Our customers also often have access to and host our confidential IP and business information on their own internal and directed third-party systems. Our data, corporate systems, third-party systems and security measures and those of our customers or the third parties that support us or our services may be subject to breaches or intrusions due to the actions of outside parties, employee error, malfeasance, a combination of these or otherwise, including social engineering and employee and contractor error or malfeasance, especially as certain of our employees engage in work from home arrangements. As a result, an unauthorized party may obtain access to our systems, networks or data, including IP and confidential business information of ourselves, our customers and/or the third parties that support us. There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party service providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of our customers or of third parties that support us and our services. Increasing capabilities and usage of AI technologies may increase the likelihood and severity of cyber-attacks and other sources of security breaches and incidents, including by increasing the frequency or intensity of attacks and being used for identification or exploitation of vulnerabilities. Geopolitical tensions, instability and conflicts may increase the cybersecurity risks that we, our customers and the third parties that support us face. We and our service providers may face difficulties or delays in identifying or responding to any actual or perceived security breach or incident. The theft or other unauthorized acquisition of, unauthorized use, publication or other processing of or access to our IP and/or confidential business information could harm our competitive position and reputation, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. In the event of any security breach or incident, including any breach or incident that results in inappropriate access to, or loss, corruption, unavailability or unauthorized acquisition, disclosure or other processing of our or our customers’ confidential information or any personal information we or our third-party service providers maintain, including that of our employees, we could suffer a loss of IP or loss of data, may be subject to claims, liability and proceedings and may incur liability and otherwise suffer financial harm.

negative publicity, which would harm our reputation; and litigation, regulatory inquiriesinquiries, investigations and/or investigationspenalties that would be costly and harm our reputation.

Our business operations depend on our ability to maintain and protect our facilities, computer systems and personnel, which are primarily located in the San Francisco Bay Area in the United States, Bulgaria, Canada, Finland, France, India, the Netherlands, South Korea and Taiwan. The San Francisco Bay Area is in close proximity to known earthquake fault zones and sites of recent historic wildfires. Our facilities and transportation for our employees are susceptible to damage from earthquakes and other natural disasters such as fires, floods, droughts, extreme temperatures and similar events. Should a catastrophe disable our facilities, we do not have readily available alternative facilities from which we could conduct our business, so any resultant work stoppage could have a negative effect on our operating results. We also rely on our network infrastructure and technology systems for operational support and business activities which are subject to physical and cyber damage, and also susceptible to other related vulnerabilities common to networks and computer systems.

Certain software we use is from open source code sources,code, which, under certain circumstances, may lead to unintended consequences and therefore could materially adversely affect our business, financial condition, operating results and cash flow.

Unanticipated changes in our tax rates or in the tax laws, treaties and/or regulations could expose us to additionalchanges incomein tax liabilities,rates or additional tax obligations, which could affect our operating resultsresults, financial condition and financialcash condition.flows.

The Organization for Economic CooperationCo-operation and Development (“OECD”) has proposed imposing a 15% global minimum tax under the Pillar Two Model Rules (“Pillar Two”), and this proposal has been adopted or is being considered by a number of countries. Additionally, on June 28, 2025, the G7 released a joint statement that it had reached an understanding with the United States for a side-by-side system based on certain accepted principles, including that U.S.-parented groups, such as ours, would be exempt from certain provisions of Pillar Two. In January 2026, the OECD released additional Administrative Guidance introducing new permanent safe harbors, including a Simplified Effective Tax Rate Safe Harbour and a Side-by-Side Safe Harbour, that are intended to reduce compliance burdens during Pillar Two implementation. These developments may further reduce compliance requirements and clarify how U.S.-parented groups are treated under the global minimum tax framework. However, any Pillar Two tax law changes, including these two Safe Harbours, are subject to legislative enactment by foreign jurisdictions. The potential effects of Pillar Two may vary depending on the specific provisions implemented by each jurisdiction, and could affect our effective tax rate and our operating results.

We are subject to a variety of laws and regulations in the United States, the European Union and other jurisdictions that involve, for example, user privacy, data protection and security, content, consumer protection and “conflict minerals” disclosure. Privacy and data protection and security regimes implemented in the European Union, the United Kingdom, California and other jurisdictions have been enacted that include penalties for noncompliance that potentially could run into the tens of millions of dollars. Other jurisdictions, including numerous states, countries and the U.S. federal government, are also contemplating such legislation. Existing and potential future laws and regulations relating to these matters may require us to modify our practices with respect to the collection, use, disclosure and other processing of data. Existing and proposed laws and regulations relating to these matters can be costly and challenging to comply with and can delay or impede the development of new products, result in negative publicity, increase our operating costs and subject us to claims or other remedies.

Congress or the U.S. courts or foreign countries will not change the nature or scope of rights afforded to patents or patent owners or alter in an adverse way the process for seeking or enforcing patents;

any progress, or lack of progress, real or perceived, in the development or sale of products that incorporate our innovations and in technology companies’ acceptance of our products, including the results of our efforts to expand into new target markets, such as those related to AI;

Our continued executionWe delivered strong results during the firstsecond quarter of2026 2026,results, driven primarily by continued demand for our memory interface chips.chips, momentum in Silicon IP and stable royalties revenue.

Key firstsecond quarter 2026 financial results included:

We achieved quarterly product revenue of $88.0$99.2 million in the firstsecond quarter of 2026, which increased by approximately 15%22% as compared to the same period in 2025, reflecting strong execution in our memory and interface portfolio. We also expanded our product and IP offerings for next-generation AI platforms, including the LPDDR5X SOCAMM2 server module chipset.

Our consolidated revenue is comprised of product revenue, royalties revenue and contract and other revenue.

Product revenue consists primarily of memory interface chips and is increasing in strategic significance. Our memory interface chips are sold to major DRAM manufacturers, Micron, Samsung and SK hynix, as well as directly to system manufacturers and cloud providers, for integration into server and client memory modules. Product revenue accounted for 49%48% of our consolidated revenue for both the three and six months ended MarchJune 31,30, 2026, as compared to 46%47% for both the three and six months ended MarchJune 31,30, 2025.

Royalties revenue is derived in part from our patent licenses,licenses throughand whichin wepart providefrom our customersSilicon certainIP rightstechnology to our broad worldwide portfolio of patented inventions.licenses. Our patent licenses enable our customers to use a portion of our patentintellectual property portfolio in their own digital electronics products. The licenses typically range in duration up to ten years and may define the specific field of use where our customers may utilize our inventions in their products. Royalties may be structured as fixed, variable or a hybrid of fixed and variable royalty payments. Leading semiconductor and electronic system companies such as AMD, Amlogic, Broadcom, CXMT, IBM, Infineon, Kioxia, Marvell, MediaTek, Micron, Nanya, Nuvoton, NVIDIA, Phison, Qualcomm, Samsung, Silicon Motion, SK hynix, Socionext, STMicroelectronics, Toshiba, Western Digital and Winbond have licensed our patents. Our Silicon IP technology licensees include a broad set of companies, ranging from well-established to leading startup semiconductor companies. The vast majority of our patentsintellectual originateproperty originates from our internal research and development efforts. Additionally, from time to time, we enter into agreements to sell certain patent assets under agreements which may also include subsequent profit-sharing. The sale of these patents, as well as the subsequent profit-sharing, are included as part of our royalties revenue. Revenue from royalties accounted for 39%40% of our consolidated revenue for both the three and six months ended MarchJune 31,30, 2026, as compared to 44%40% and 42% for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

Contract and other revenue consists primarily of Silicon IP,IP whichtechnology isdevelopment comprisedprojects ofrelated to our high-speed interface and security IP. Revenue sources under contract and other revenue include our IP core licenses, software licenses and related implementation, support and maintenance fees and engineering services fees. The timing and amounts invoiced to customers can vary significantly depending on specific contract terms and can therefore have a significant impact on deferred revenue or accounts receivable in any given period. Contract and other revenue accounted for 12% of our consolidated revenue for both the three and six months ended MarchJune 31,30, 2026, as compared to 10%13% ofand our consolidated revenue11% for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $3.1$7.2 million and $10.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025,2025. The increases were primarily due to higher sales volumes of our memory interface chips.

Cost of contract and other revenue reflects the portion of the total engineering costs which are specifically devoted to individual customer development and support services. Cost of contract and other revenue increased $0.5$0.2 million and $0.7 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere primarily due to higher engineering services associated with the contracts.

Total research and development expenses for the three months ended MarchJune 31,30, 2026 increased approximately $7.6$4.8 million as compared to the same period in 2025. The increase was primarily driven by continued investment in our research and development initiatives and primarily reflected higher headcount-related expenses of $4.1$2.2 million and an increase in stock-based compensation expenses of $0.8$0.7 million. In addition, prototyping costs and depreciation expense increased by $1.4$1.2 million and $1.0$0.6 million, respectively. Total research and development expenses for the six months ended June 30, 2026 increased approximately $12.3 million as compared to the same period in 2025. The increase was primarily driven by continued investment in our research and development initiatives and primarily reflected higher headcount-related expenses of $6.2 million and an increase in stock-based compensation expenses of $1.4 million. In addition, prototyping costs and depreciation expense increased by $2.6 million and $1.6 million, respectively.

Total sales, general and administrative expenses for the three months ended MarchJune 31,30, 2026 increased approximately $3.7$10.2 million as compared to the same period in 2025, primarilydue to increases in professional fees of $7.0 million, payroll-related expenses of $1.5 million and stock-based compensation expenses of $1.0 million. Total sales, general and administrative expenses for the six months ended June 30, 2026 increased approximately $13.7 million as compared to the same period in 2025, due to increases in professional fees of $8.8 million, payroll-related expenses and legal expenses of $2.1$3.6 million and $1.6 million, respectively, offset by a decrease in stock-based compensationrecruiting expenses of $0.6 million.

As of MarchJune 31,30, 2026, our semiconductor, security and other technologies are covered by 2,0292,010 U.S. and foreign patents. Additionally, we have 481476 patent applications pending in various countries. Some of the patents and pending patent applications are derived from a common parent patent application or are foreign counterpart patent applications. We file applications for and obtain patents in the United States and in selected foreign countries where we believe filing for such protection is appropriate and would further our overall business strategy and objectives. In some instances, obtaining appropriate levels of protection may involve prosecuting continuation and counterpart patent applications based on a common parent application. We believe our patented innovations provide our customers with the ability to achieve improved performance, lower risk, greater cost-effectiveness, and other benefits in their products and services.

We have a high degree of revenue concentration. Our top five customers represented approximately 70%60% and 71%64% of our consolidated revenue for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to 68% and 69% for the three and six months ended June 30, 2025, respectively. The level of concentration and particular customers which account for this concentration have varied in the past and may vary in the future as a result of demand for our semiconductor products, timing of new contracts, expiration of existing contracts, as well as timing of contract expirations and renewals, industry consolidation and the volumes and prices at which the customers have recently sold to their customers. These variations are expected to continue in the foreseeable future.

Our revenue from companies headquartered outside of the United States accounted for approximately 88%82% and 84% of our consolidated revenue for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to 80% and 82% for the three and six months ended June 30, 2025, respectively. We expect that revenue derived from international customers will continue to represent a significant portion of our total revenue in the future. Currently, our revenue from international customers is predominantly denominated in U.S. dollars. For additional information concerning international revenue, refer to Note 6,7, “Segments and Major Customers,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Product revenue consists primarily of revenue from the sale of memory products. Product revenue increased approximately $11.7$17.9 million and $29.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere due to higher sales of memory interface chips, as well as contributions from new products.

Royalties revenue, which includes patent and technology license royalties, decreasedincreased approximately $4.4$15.6 million and $11.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The decreaseincreases waswere primarily due to the timing and structure of license agreements and renewals.

We are continuously in negotiations for licenses with prospective customers. We expect that royalties revenue will continue to vary from period to period based on our success in adding new customers, renewing or extending existing agreements, as well as the level of variation in our customers’ reported shipment volumes, sales price and product mix, offset in part by the proportion of customer payments that are fixed or hybrid in nature.

Contract and other revenue consists of revenue from technology development projects. Contract and other revenue increased approximately $6.2$1.7 million and $7.8 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere due to higher revenue associated with our Silicon IP offerings.

Cost of product revenue mainly includes costs attributable to the sale of memory interface chip products. Cost of product revenue increased approximately $3.1$7.2 million and $10.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere primarily due to higher sales volumes of our memory interface chips.

Cost of contract and other revenue reflects the portion of the total engineering costs whichthat areis specifically devoted to individual customer development and support services. Cost of contract and other revenue increased $0.5$0.2 million and $0.7 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere primarily due to higher engineering services associated with the contracts.

Total research and development expenses for the three months ended MarchJune 31,30, 2026 increased approximately $7.6$4.8 million as compared to the same period in 2025. The increase was primarily driven by continued investment in our research and development initiatives and primarily reflected higher headcount-related expenses of $4.1$2.2 million and an increase in stock-based compensation expenses of $0.8$0.7 million. In addition, prototyping costs and depreciation expense increased by $1.4$1.2 million and $1.0$0.6 million, respectively.

Total sales, general and administrative expenses for the three months ended MarchJune 31,30, 2026 increased approximately $3.7$10.2 million as compared to the same period in 2025, primarily due to increases in professional fees of $7.0 million, payroll-related expenses and legal expenses of $2.1$1.5 million and $1.6 million, respectively, offset by a decrease in stock-based compensation expenses of $0.6$1.0 million.

Interest income and other income (expense), net, primarily includes interest income from our investment portfolio and from the significant financing component of licensing agreements, as well as any gains or losses from the re-measurementremeasurement of our monetary assets or liabilities denominated in foreign currencies. For the three and six months ended MarchJune 31,30, 2026 and 2025, interest income and other income (expense), net, consisted primarily of interest income generated from our investment portfolio. Interest income increased during the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025 due to anthe increasegrowth inof our investment portfolio, partially offset by a decline in interest rates on our investments.

Interest expense is primarily associated with long-term software licenses. Interest expense remained relatively flat for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025.

Our provisions for income taxes for the three and six months ended MarchJune 31,30, 2026 and 2025 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2026 and 2025, respectively,2026, offset by tax benefits from excess stock-based compensation deductions. Our provision for income taxes for the three and six months ended MarchJune 31,30, 2026 reflected effective tax rates of 15.0% and 13.9%, respectively. Our provisions for income taxes for the three and six months ended June 30, 2025 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2025, offset by tax benefits from excess stock-based compensation deductions. Our provision for income taxes for the three and six months ended June 30, 2025 reflected effective tax rates of 12.8%14.6% and 10.8%,12.7%, respectively,respectively. For both 2026 and 2025, our effective tax rates differed from the U.S. statutory rate primarily due to tax benefits from excess stock-based compensation deductions.

During both the three months ended MarchJune 31,30, 2026 and 2025, we paid foreign withholding taxes of $5.5$5.4 million. During the six months ended June 30, 2026 and 2025, we paid foreign withholding taxes of $10.9 million and $5.6$11.0 million, respectively.

In the third quarter of 2025, the United States enacted federal tax legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures and other changes to the U.S. taxation of profits derived from foreign operations. As a result of the enactment of the legislation, there was an increase to our income tax expense in 2025, primarily related to changes in the taxation of profits derived from foreign operations and, more specifically, the foreign-derived intangible income deduction. The impact of OBBBA also increased our income tax expense and effective tax rate for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025.

We currently anticipate that existing cash, cash equivalents and marketable securities balances and cash flows from operations will be adequate to meet our cash needs for at least the next 12 months. Additionally, the majority of our cash and cash equivalents are in the United States. Our cash needs for the threesix months ended MarchJune 31,30, 2026,2026 were funded primarily from cash collected from our customers.

To provide us with more flexibility in returning capital to our stockholders, on October 29, 2020, our 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 threesix months ended MarchJune 31,30, 2026, we repurchased shares of our common stock under the 2020 Repurchase Program as discussed in the “Share Repurchase Program” section below.

Cash provided by operating activities of $83.2$144.5 million for the threesix months ended MarchJune 31,30, 20262026, was primarily attributable to cash generated from product sales, customer licensing and engineering services fees. Changes in operating assets and liabilities for the threesix months ended MarchJune 31,30, 2026 primarily included a decrease in accountsunbilled receivable,receivables, offset byand an increase in inventoriesaccounts andpayable, decreasesoffset by increases in accruedinventories, salariesaccounts andreceivable, benefitsas andwell otheras liabilities,a anddecrease in deferred revenue.

Cash provided by operating activities of $77.4$171.8 million for the threesix months ended MarchJune 31,30, 2025, was primarily attributable to cash generated from product sales, customer licensing and engineering services fees. Changes in operating assets and liabilities for the threesix months ended MarchJune 31,30, 2025 primarily included decreases in accounts receivable and inventories, and an increase in income taxes payablepayable, offset by an increase in income taxes receivable, and decreases in accounts receivable and unbilled receivables, offset by a decrease inpayable, accrued salaries and benefits and other accruedcurrent liabilities, as well as an increase in income taxes receivable.liabilities.

Cash used in investing activities of $85.3$180.3 million for the threesix months ended MarchJune 31,30, 2026, consisted of purchases of available-for-sale marketable securities of $255.8$488.9 million and $11.6$20.7 million paid to acquire property and equipment, offset by proceeds from the maturities of available-for-sale marketable securities of $182.1$329.3 million.

Cash used in investing activities of $8.4$139.6 million for the threesix months ended MarchJune 31,30, 2025, consisted of purchases of available-for-sale marketable securities of $91.2$303.8 million and $7.9$14.4 million paid to acquire property and equipment, offset by proceeds from the maturities of available-for-sale marketable securities of $90.7$178.6 million.

Cash used in financing activities of $46.3$58.9 million for the threesix months ended MarchJune 31,30, 2026, was primarily due to $38.4$52.7 million in payments of taxes related to net share settlement of equity awards, $5.3$8.5 million paid under installment payment arrangements to acquire fixed assets and an$3.0 aggregate paymentmillion of $2.6share repurchases, offset by $5.2 million asin partproceeds from the issuance of ourcommon sharestock repurchasesunder inequity theincentive first quarter of 2026.plans.

Cash used in financing activities of $36.8$44.8 million for the threesix months ended MarchJune 31,30, 2025, was primarily due to $30.8$35.0 million in payments of taxes related to net share settlement of equity awards, $3.8$7.7 million paid under installment payment arrangements to acquire fixed assets,assets and an$5.8 aggregate paymentmillion of $2.2share repurchases, offset by $3.7 million asin partproceeds from the issuance of ourcommon sharestock repurchasesunder inequity theincentive first quarter of 2025.plans.

As of MarchJune 31,30, 2026, our material contractual obligations were as follows:

The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $26.0$26.2 million, including $24.7$25.1 million recorded as a reduction of long-term deferred tax assets and $1.3$1.1 million in long-term income taxes payable as of MarchJune 31,30, 2026. As noted in Note 13,14, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the timing of the outcome at this time.

For our lease commitments as of MarchJune 31,30, 2026, refer to Note 9,10, “Leases,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

During the threesix months ended MarchJune 31,30, 2026, we continued to operateoperated under atwo share repurchase planplans with Mizuho Securities USA, LLC,LLC which(“Mizuho”). The first plan was entered into in 2025 and expired on March 31, 2026.2026, and the second plan was entered into on May 29, 2026 and is scheduled to expire on September 30, 2026, with provisions to terminate sooner. The execution of share repurchases wasis dependent on our stock price reaching certain levels. During the threesix months ended MarchJune 31,30, 2026 and 2025,2026, we repurchased an immaterial amountnumber of shares under the 2020 Repurchase Program, which were retired and recorded as a reduction to stockholders’ equity.

As of MarchJune 31,30, 2026, there remained an outstanding authorization to repurchase approximately 5.5 million shares of our outstanding common stock under the 2020 Repurchase Program.