Rambus, Inc. reports 359% CAPEX growth in 2020 and 8.4% Revenue growth
02/01/2021 • About Rambus, Inc. (
$RMBS) • By InTwits
Rambus, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.1% in 2020, -24.3% in 2019, -20.3% in 2018, 27.9% in 2017, 24.9% in 2016
- Rambus, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $30m in 2020, $6m in 2019, $11m in 2018, $9m in 2017, $9m in 2016
- The company has unprofitable business model: ROIC is -3.9%
- It operates with high leverage: Net Debt/EBITDA is 5.9x while industry average is 0.3x
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 increased on 8.4%. Revenue growth showed slowdown in 20Q4 - it was 3.3% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.7 pp from 13.4% to 6.7% in FY2020.
Gross Margin decreased on 2.1 pp from 77.1% to 75.0% in 2020. Gross Margin stuck to a declining trend at -1.3 pp per annum in 2016-2020. SG&A as a % of Revenue dropped on 11.2 pp from 46.5% to 35.3% in 2020.
Net Income margin surged on 22.4 pp from -40.4% to -18.0% in 2020. During 2016-2020 Net Income margin bottomed in 2018 at -68.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 12.2%. The company showed CAPEX/Revenue growth of 9.9 pp from 2.4% in 2017 to 12.2% in 2020. It's average level of CAPEX/Revenue for the last three years was 6.6%. Rambus, Inc. investments to CAPEX were large: 296% of EBITDA.
Return on investment
The company operates at negative ROIC (-3.9%) and ROE (-4.6%). ROIC increased on 4.8 pp from -8.6% to -3.9% in 2020. ROE increased on 4.5 pp from -9.1% to -4.6% in 2020. During the last 5 years ROE bottomed in 2018 at -19.9% and was growing since that time.
Leverage (Debt)
Debt level is 5.9x Net Debt / EBITDA and 19.4x Debt / EBITDA. Net Debt / EBITDA jumped5.9x from to 5.9x in 2020. Debt showed almost no change in 2020 while cash jumped on 33.2%.
Rambus, Inc. has no short term refinancing risk: cash is higher than short term debt (2,882.0%).
Management team
Rambus, Inc.'s CEO is Luc Seraphin. Luc Seraphin has 2 years tenure with the company. Rambus, Inc.'s CFO is Rahul Mathur. Rahul Mathur has 4 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
Rambus, Inc. ($RMBS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 336.6 | 393.1 | 231.2 | 224.0 | 242.7 | 8.4% |
| Gross Profit | 269.5 | 313.9 | 177.5 | 172.7 | 182.0 | 5.4% |
| SG&A | 95.1 | 110.9 | 103.9 | 104.1 | 85.6 | -17.8% |
| EBITDA | 83.7 | 109.6 | -46.9 | -54.4 | 10.1 | |
| Net Income | 6.8 | -22.9 | -158.0 | -90.4 | -43.6 | |
Balance Sheet
|
|---|
| Cash | 135.3 | 225.8 | 115.9 | 102.2 | 136.1 | 33.2% |
| Short Term Debt | 0.0 | 78.5 | 0.0 | 6.4 | 4.7 | -25.7% |
| Long Term Debt | 126.2 | 135.4 | 141.9 | 188.7 | 190.3 | 0.9% |
Cash flow
|
|---|
| Capex | 8.6 | 9.4 | 10.8 | 6.5 | 29.7 | 359.3% |
Ratios
|
|---|
| Revenue growth | 13.6% | 16.8% | -41.2% | -3.1% | 8.4% | |
| EBITDA growth | -23.1% | 30.9% | -142.8% | 16.0% | -118.5% | |
|
|---|
| Gross Margin | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% | -2.1% |
| EBITDA Margin | 24.9% | 27.9% | -20.3% | -24.3% | 4.1% | 28.4% |
| SG&A, % of revenue | 28.3% | 28.2% | 44.9% | 46.5% | 35.3% | -11.2% |
| Net Income Margin | 2.0% | -5.8% | -68.3% | -40.4% | -18.0% | 22.4% |
| CAPEX, % of revenue | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% | 9.4% |
|
|---|
| ROIC | 6.7% | 9.4% | -9.6% | -8.6% | -3.9% | 4.8% |
| ROE | 1.3% | -4.1% | -19.9% | -9.1% | -4.6% | 4.5% |
| Net Debt/EBITDA | -0.1x | -0.1x | | | 5.9x |
Rambus, Inc. ($RMBS) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 64 | 60 | 57 | 62 | | 32.3% | 2.8% | -0.8% | 3.3% |
| EBITDA | 4 | 2 | 0 | 19 | | - | - | - | 1,923.5% |
| Net Income | -8 | -11 | -13 | -12 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 175 | 103 | 89 | 136 | | 22.7% | -9.6% | -2.6% | 33.2% |
| Short Term Debt | 5 | 4 | 5 | 5 | | -44.5% | -46.7% | -38.0% | -25.7% |
| Long Term Debt | 189 | 190 | 190 | 190 | | 21.0% | 22.7% | 21.5% | 0.9% |
Ratios
|
|---|
| Gross Margin | 82.0% | 73.1% | 73.2% | 78.3% | | 5.1% | -4.6% | -4.9% | 2.6% |
| EBITDA Margin | 6.3% | 3.9% | 0.2% | 30.5% | | 46.5% | 46.5% | 19.7% | 28.9% |
| Net Income Margin | -12.5% | -18.0% | -22.5% | -19.5% | | 42.5% | 45.4% | 7.7% | -3.6% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.9% | -3.1% | 1.0% |
|---|
| Rambus, Inc. ($RMBS) | - | 16.8% | -41.2% | -3.1% | 8.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| Texas Instruments Incorporated ($TXN) | 61.8% | 64.3% | 65.1% | 63.7% | 64.1% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.8% | 13.6% | 17.4% |
|---|
| Rambus, Inc. ($RMBS) | 24.9% | 27.9% | -20.3% | -24.3% | 4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.2% | 3.8% | 3.6% |
|---|
| Rambus, Inc. ($RMBS) | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 3.0% | 3.8% | 5.5% |
|---|
| Rambus, Inc. ($RMBS) | 6.7% | 9.4% | -9.6% | -8.6% | -3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| Broadcom Inc. ($AVGO) | 4.0x | 0.9x | 1.4x | 3.0x | 3.1x |
| |
|---|
| Median (31 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
