Rambus (RMBS) AI Stock Analysis

Company Guidance

For Q4, Rambus expects revenue to be between $227 million and $233 million, product revenue to be between $127 million and $133 million, royalties revenue to be between $68 million and $74 million, and contract and other revenue to be between $26 million and $32 million; at the midpoint, product revenue is expected to increase 34% year-over-year and 14% sequentially. Q4 non-GAAP total operating costs are expected to be between $124 million and $120 million, capital expenditures approximately $8 million, non-GAAP operating profit between a profit of $103 million and $113 million, interest and other income approximately $6.5 million, and, assuming a non-GAAP tax rate of 16% and 109 million diluted shares outstanding, non-GAAP earnings per share in the range from $0.84 to $0.92, representing at the midpoint growth of 30% year-over-year and 5% sequentially. The company expects another record quarter of product revenue in Q4, which it expects to grow more than 30% year-over-year; 2026 revenue is expected to grow approximately 18% over 2025, including product revenue growth of approximately 24%, and non-GAAP earnings per share to grow approximately 24% over 2025. It expects to return 40% to 50% of free cash flows to shareholders over time, product gross margin in the near term within 60% to 63%, a long-term target of 60% to 65%, 2026 product gross margin right in the middle of the 60% to 63% range, and its silicon IP business around $130 million, growing at 10% to 15%, more like growing towards the higher end of that range.