Investing.com -- Rambus Inc (NASDAQ:RMBS) reported third quarter results that exceeded analyst expectations, but shares fell 1.8% in after-hours trading Monday as investors assessed the company's fourth quarter guidance.
The chip and IP provider posted adjusted earnings per share of $0.84, beating the analyst consensus of $0.79 by $0.05. Revenue reached a record $218.3 million, surpassing the estimate of $213.21 million and representing a 22% increase from $178.5 million in the same quarter last year. Product revenue hit a record $114.3 million, up 22% YoY, while royalties revenue totaled $77.0 million and contract and other revenue came in at $27.0 million.
For the fourth quarter of 2026, Rambus expects adjusted EPS of $0.84 to $0.92, with a midpoint of $0.88 that modestly exceeds the analyst consensus of $0.84. The company projects revenue of $227 million to $233 million, with a midpoint of $230 million above the consensus estimate of $225 million. Product revenue is expected to range from $127 million to $133 million.
"Rambus delivered record quarterly revenue and earnings that exceeded our guidance, with strong customer demand driving record product revenue and record cash from operations," said Luc Seraphin, president and chief executive officer of Rambus. "Through ongoing execution on our roadmap and accelerating demand for our differentiated solutions, we expect an even stronger performance in Q4 and are well positioned to deliver long-term profitable growth and value for our stockholders."
The company generated a record $102.5 million of cash from operating activities during the quarter. Rambus also announced expanded product and IP offerings for next-generation AI systems, including a PMIC for LPDDR6 SOCAMM2 and data center-class Root of Trust security IP.
GAAP diluted earnings per share for the third quarter was $0.69, compared to $0.44 in the year-ago period.
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