TLDR
- Rambus hits record revenue but supply issue clouds near-term outlook
- DDR5 boom fuels Rambus growth even as Q1 guidance softens
- Rambus posts strong year as data-center demand surges
- Supply hiccup trims Q1, long-term Rambus growth story intact
- AI and DDR5 momentum power Rambus despite short-term drag
Rambus (RMBS)Â shares slipped slightly even as the company posted record annual results and steady fourth-quarter momentum. The stock ended the session at $113.71 and moved 0.11% lower after a muted close. The update highlighted strong demand across data-center markets even as a supply issue weighed on early 2026 plans.
Record Revenue Growth Supports Expanding Market Reach
Rambus reported full-year revenue of $348 million and marked a 41% rise as memory demand improved. The company advanced its presence in high-performance segments and widened product traction across new customer categories. Fourth-quarter revenue reached $190.2 million and surpassed internal targets by a comfortable margin.
Product revenue climbed to $96.8 million and grew 32% from last year as shipments improved across core lines. Royalty streams held steady and supported a balanced revenue mix during the period. In addition, licensing billings maintained firm levels and helped stabilize quarterly momentum.
Cash from operations reached $360 million and strengthened liquidity through the year. Free cash flow totaled $320.9 million and delivered a 45% margin as spending stayed disciplined. Furthermore, capital outlays and depreciation aligned with guidance and reinforced steady operating control.
DDR5 Adoption and Data-Center Growth Lift Outlook
Rambus expanded its DDR5 footprint as demand for faster systems increased across global data-center platforms. The company secured new design wins for high-speed memory and interconnect IP. Companion PMIC products gained traction and shaped broader adoption across server categories.
AI-linked workloads continued to scale and created rising need for faster memory solutions. The company aligned its roadmap with this shift and expanded its reach across merchant and custom markets. New product lines added momentum in the second half of 2025 and are set to build further in early 2026.
Engagement increased around HBM4, GDDR7 and PCIe 7 digital IP as customers advanced next-generation plans. Security IP demand also rose as more firms adopted additional protection layers. These developments supported confidence in long-term market positioning and strengthened growth expectations.
Supply Chain Issue Slows Q1 Outlook but Recovery Expected
Rambus identified a back-end manufacturing issue at an outsourced partner and implemented corrective steps. The disruption affected an older batch of RCD parts and required additional screening. Available supply tightened and shaped a temporary constraint for early 2026.
The issue will limit first-quarter product revenue and reduce contributions by a low double-digit amount. Guidance now targets revenue between $172 million and $178 million for the period. Royalty and licensing activity remains stable and reflects consistent operational progress.
Management expects inventory levels to normalize before the end of the first quarter. Growth is set to strengthen in the second quarter as DDR5 output improves. MRDIMM contributions are expected to begin late in the year and expand further in 2027.
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