Rambus Q3 revenue beats analyst expectations on strong customer demand

Overview

• US chip and silicon IP provider's Q3 revenue rose 22% yr/yr, beating analyst expectations

• Adjusted EPS for Q3 beat analyst expectations

• Company cites strong demand in AI and data center markets for record results

Outlook

• Rambus expects Q4 non-GAAP revenue between $227 mln and $233 mln

• Company sees Q4 non-GAAP product revenue of $127 mln to $133 mln

• Rambus expects Q4 non-GAAP diluted EPS of $0.84 to $0.92

Result Drivers

• CUSTOMER DEMAND - Co said strong customer demand drove record product revenue and cash from operations, per CEO Luc Seraphin

• AI AND DATA CENTER EXPANSION - Co said expansion of product and IP offerings for next-generation AI and data center systems contributed to performance

• PRODUCT REVENUE GROWTH - Co reported record product revenue, up 15% qtr/qtr and 22% yr/yr

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for Rambus Inc. is $144.62, about 68.8% above its October 23 closing price of $85.65

• The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 39 three months ago

Reuters Recommended Reads

• Oct 26 - Cadence unveils suite of AI models that chipmakers can run in-house

• Oct 26 - Unconventional AI buys Israeli chip startup NeuReality to speed product development

• Oct 26 - Meta eyes record $95 billion equity raise to fund AI expansion

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)