Rambus, Inc. EBITDA dropped on 143% and Revenue dropped on 41.2%
01/28/2019 • About Rambus, Inc. (
$RMBS) • By InTwits
Rambus, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Rambus, Inc. is a company in decline: 2018 revenue growth was -41.2%, 5 years revenue CAGR was -3.2%
- EBITDA Margin is quite volatile: -20.3% in 2018, 27.9% in 2017, 24.9% in 2016, 36.7% in 2015, 39.0% in 2014
- Rambus, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $76m in 2018, $40m in 2017, $8m in 2016, $10m in 2015, $11m in 2014
- The company has unprofitable business model: ROIC is -9.6%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Rambus, Inc.'s Revenue dropped on 41.2%. Annual revenue decline showed slowdown in 18Q4 - revenue dropped on 32.7%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 48.2 pp from 27.9% to -20.3% in 2018.
Gross Margin decreased on 3.1 pp from 79.9% to 76.8% in 2018. Gross Margin declined at -2.3 pp per annum in 2014-2018. SG&A as a % of Revenue surged on 16.7 pp from 28.2% to 44.9% in 2018.
Net Income margin dropped on 62.5 pp from -5.8% to -68.3% in 2018. During the last 5 years Net Income margin topped in 2015 at 71.3% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 4.7%. Rambus, Inc.'s CAPEX/Revenue increased on 2.6 pp from 2.1% in 2015 to 4.7% in 2018. It's average level of CAPEX/Revenue for the last three years was 3.2%.
Return on investment
The company operates at negative ROIC (-9.6%) and ROE (-19.9%). ROIC dropped on 18.9 pp from 9.4% to -9.6% in 2018. ROE dropped on 15.9 pp from -4.1% to -19.9% in 2018. During 2014-2018 ROE topped in 2015 at 46.0% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is . Net Debt / EBITDA jumped on 0.1x from -0.1x to in 2018. Debt dropped on 33.6% while cash dropped on 48.7%.
The company has no short term refinancing risk: short term debt is zero.
Management team
Rambus, Inc.'s CEO Luc Seraphin is a founder and has spent 0 years with the company. The company's CFO Rahul Mathur has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2018
Rambus, Inc. ($RMBS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 296.6 | 296.3 | 336.6 | 393.1 | 231.2 | -41.2% |
| Gross Profit | 254.6 | 250.9 | 269.5 | 313.9 | 177.5 | -43.5% |
| SG&A | 74.8 | 70.6 | 95.1 | 110.9 | 103.9 | -6.3% |
| EBITDA | 115.6 | 108.9 | 83.7 | 109.6 | -46.9 | -142.8% |
| Net Income | 26.2 | 211.4 | 6.8 | -22.9 | -158.0 | |
Balance Sheet
|
|---|
| Cash | 154.1 | 143.8 | 135.3 | 225.8 | 115.9 | -48.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 78.5 | 0.0 | -100.0% |
| Long Term Debt | 115.1 | 119.4 | 126.2 | 135.4 | 141.9 | 4.8% |
Cash flow
|
|---|
| Capex | 7.2 | 6.1 | 8.6 | 9.4 | 10.8 | 14.7% |
Ratios
|
|---|
| Revenue growth | 9.2% | -0.1% | 13.6% | 16.8% | -41.2% | |
| EBITDA growth | 73.0% | -5.8% | -23.1% | 30.9% | -142.8% | |
|
|---|
| Gross Margin | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% | -3.1% |
| EBITDA Margin | 39.0% | 36.7% | 24.9% | 27.9% | -20.3% | -48.2% |
| SG&A, % of revenue | 25.2% | 23.8% | 28.3% | 28.2% | 44.9% | 16.7% |
| Net Income Margin | 8.8% | 71.3% | 2.0% | -5.8% | -68.3% | -62.5% |
| CAPEX, % of revenue | 2.4% | 2.1% | 2.5% | 2.4% | 4.7% | 2.3% |
|
|---|
| ROIC | 13.4% | 14.4% | 6.7% | 9.4% | -9.6% | -18.9% |
| ROE | 7.2% | 46.0% | 1.3% | -4.1% | -19.9% | -15.9% |
| Net Debt/EBITDA | -0.3x | -0.2x | -0.1x | -0.1x | |
Rambus, Inc. ($RMBS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 46 | 56 | 60 | 69 | | -52.3% | -40.4% | -39.7% | -32.7% |
| EBITDA | -30 | -9 | -12 | 3 | | -210.3% | -139.3% | -137.4% | -88.4% |
| Net Income | -36 | -15 | -105 | -2 | | -1,287.3% | -689.5% | -1,463.1% | |
Balance Sheet
|
|---|
| Cash | 122 | 248 | 135 | 116 | | -31.0% | 48.5% | -26.2% | -48.7% |
| Short Term Debt | 80 | 81 | 0 | 0 | | | | -100.0% | -100.0% |
| Long Term Debt | 174 | 139 | 177 | 142 | | 5.0% | -17.2% | 371.9% | 4.8% |
Ratios
|
|---|
| Gross Margin | 64.5% | 72.9% | 81.0% | 84.5% | | -15.2% | -4.0% | 0.8% | 2.2% |
| EBITDA Margin | -64.9% | -15.3% | -19.3% | 5.0% | | -93.0% | -38.6% | -50.3% | -24.0% |
| Net Income Margin | -76.9% | -27.2% | -175.5% | -2.9% | | -80.0% | -30.0% | -183.3% | 32.6% |
Peers in Semiconductors
Below we provide Rambus, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 4.4% | 10.9% | 5.0% |
|---|
| Rambus, Inc. ($RMBS) | | -0.1% | 13.6% | 16.8% | -41.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| Xilinx, Inc. ($XLNX) | 68.8% | 70.2% | 69.7% | 69.9% | 69.9% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 10.0% |
|---|
| Rambus, Inc. ($RMBS) | 39.0% | 36.7% | 24.9% | 27.9% | -20.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.4% |
|---|
| Rambus, Inc. ($RMBS) | 2.4% | 2.1% | 2.5% | 2.4% | 4.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 5.2% |
|---|
| Rambus, Inc. ($RMBS) | 13.4% | 14.4% | 6.7% | 9.4% | -9.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (46 companies) | -0.6x | -0.3x | 0.4x | 0.4x | 0.3x |
|---|
