Strategic Performance Drivers

• Performance attribution for the quarter was driven by 15% year-over-year product revenue growth, fueled by the ongoing transition from DDR5 Gen 2 to Gen 3 chips.

• Management attributes the shift toward agentic AI and inference as a primary catalyst, as these workloads increase the ratio of CPUs to GPUs and demand higher memory capacity and bandwidth.

• The company is strategically expanding its portfolio beyond core RCD chips into chipsets for SOCAMM2 and MRDIMM to capture richer content per server module.

• Operational execution in Q1 addressed a quality issue identified in the quarter, enabling the ongoing restabilization and normalization of the supply chain as the company guides for 11% sequential growth in Q2.

• Silicon IP growth is accelerating as hyperscalers increasingly develop custom silicon for AI, driving demand for advanced PCIe retimers, switches, and security engines.

• The market environment is characterized by a heterogeneous AI infrastructure where traditional and AI server platforms must combine to support complex, always-on orchestration.

Strategic Outlook and Guidance Assumptions

• Q2 guidance assumes 11% sequential product revenue growth at the midpoint, supported by the continued ramp of next-generation platforms.

• Management anticipates supply chain tightness, particularly in back-end capacity, to persist going into 2027 due to high data center demand and geographic shifts in manufacturing.

• The revenue ramp for new MRDIMM products is expected to start in earnest in 2027, contingent on the launch timelines of Intel and AMD platforms, with the full $600 million TAM opportunity expected to be realized by 2028.

• Strategic inventory building will continue in Q2 to mitigate potential supply chain constraints and support steep customer ramps for new product generations.

• Rambus expects to exit 2026 with companion chips contributing mid-double-digits to product revenue, an increase from the low double-digit contribution seen in Q1.

Risk Factors and Structural Dynamics

• Back-end supply chain lead times remain long, driven by semiconductor companies moving operations out of China and increased competition for data center components.

• The new SOCAMM2 chipset is positioned as a strategic stepping stone for LPDDR in servers, though management expects minimal financial impact in 2026 due to low initial volumes.

• Product revenue growth is heavily dependent on the timing of third-party CPU platform launches, which dictates the adoption rate of new memory interface generations.

• Geopolitical shifts have strained total capacity at back-end suppliers, though management has not yet seen direct impacts from Middle East conflicts on basic elements like gas.