Q3 2010 Earnings Call
October 21, 2010 5:00 p.m. ET
Satish Rishi, SVP and CFO
Harold Hughes, President and CEO
Tom Lavelle, SVP and General Counsel
Sharon Holt, SVP, Licensing & Marketing
Jeff Schreiner - CapStone Investments
Michael Cohen - MDC Financial
Kelly Anderson - Sidoti & Co.
Hamed Khorsand - BWS Financial
Previous Statements by RMBS
» Rambus Inc. Q2 2010 Earnings Call Transcript
» Rambus, Inc. Q1 2010 Earnings Call Transcript
» Rambus, Inc. Q4 2009 Earnings Call Transcript
» Rambus Inc. Q3 2009 Earnings Call Transcript
Good day ladies and gentlemen and welcome to your Q3 2010 Rambus Incorporated conference call. [Operator Instructions.] And now it's my pleasure to announce your host, Satish Rishi. Satish, go ahead.
Thank you operator and welcome to the Rambus third quarter 2010 conference call. I'm Satish Rishi, chief financial officer and on the call today are Harold Hughes, our president and CEO; Tom Lavelle, our general counsel; and Sharon Holt, senior VP and general manager of our semiconductor business group.
The press release for the results that will be discussed here today has been filed with the SEC on Form 8-K. A replay of this conference call will be available for the next week at 800-642-1687. You can hear the replay by dialing the toll-free number and then entering ID number 15043450 when you hear the prompt. In addition, we are simultaneously webcasting this call and a replay can be accessed on our website beginning today at 5:00 P.M. Pacific Time.
I need to advise you that the discussion today will contain forward-looking statements regarding our financial prospects, pending litigation, and demand for our technologies, among other things. These statements are subject to risks and uncertainties, which are more fully described in the documents we filed with the SEC, including our 8-Ks, 10-Qs and 10-Ks.
These forward-looking statements could differ materially from our actual results and we are under no obligation to update these statements. Further, we will discuss non-GAAP financial measures on the call today and we have posted on our website reconciliations of these non-GAAP financials to the most directly comparable GAAP measures. You can find a copy of our earning release and the reconciliation on our website at www.rambus.com, on the Investor Relations page in the financial releases.
With that I'll turn the call over to Harold.
Thanks Satish, and good afternoon, everyone. Customer licensing income for the third quarter was $42 million. A major swing factor for Q3, as we discussed when we provided guidance the last call, was signing patent license renewals. While the renewal negotiations are active and proceeding well, they were not concluded in Q3.
Our business model builds on a value creation cycle that starts with innovation. As a company of inventors, we have built a portfolio of over 1,000 active patents. In addition, we have close to 1,000 pending applications in the pipeline. The second part of our value creation cycle is driving adoption of our innovations.
In support of this effort, we participated in a number of industry events during the course of the quarter. We had multiple presentations and technology demonstrations at MemCom in July. There we showcased our DDR 3PHY running at 1866 mega transfers per second with the ability to run at 2133.
This is state of the art performance for DDR3, but particularly so since we implemented our silicon demo in a low-cost wire bond package. Wire bond is a key packaging technology for high-volume consumer electronics products.
Also during the quarter, at the Intel Developer Forum, two of our PhDs presented how we can meet the challenges of next-generation graphics and mobile memory. From an application standpoint, both graphics and mobile memory products must deliver high-performance video and images at the lowest possible power.
Our engineers have also shown how differential signaling can meet both performance and power requirements of next-generation graphics and mobile products. Our Mobile XDR solution is specifically tailored to enable breakthrough performance in upcoming smart phones and tablets. With solutions like Mobile XDR memory, Rambus solves some of the industry's toughest system challenges.
The third stage in the value creation cycle is to monetize our innovations. Progress was made here with the signing of a patent license with NVIDIA during the quarter. That agreement was ultimately a result of the action we pursued at the ITC. We are prepared to take whatever action is needed, including recourse to the legal process, in order to ensure we are fairly compensated for the use of our patented innovations.
Meanwhile, we continue to make progress on our diversification strategy. We are staffing up and equipping our lighting and display technology team to seize the tremendous opportunity of solid state lighting. We've moved into a new design facility in Brecksville Ohio, hired additional engineers and researchers, and are almost done with setting up a state of the art prototyping line there.
We believe our commitment to innovation makes Rambus a great home for inventors. As we've said previously, we intend to bring on board new businesses like lighting and display that serve our mission and can benefit from Rambus's strengths. We have the organizational capabilities to enable rapid integration of the acquisitions we make and with our world-class licensing platform we can drive the growth of our new businesses with only modest investment in people and capital.
And with that, I'll turn the call over to Tom to provide an update on legal developments. Tom?
Thanks Harold, and good afternoon everyone. At the end of July we received notification of the International Trade Commission's final determination regarding certain NVIDIA products. The ITC affirmed the findings of its administrative law judge, finding certain NVIDIA products infringed three Rambus patents.