Rambus Q4 2025 Rambus Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Rambus Inc Earnings Call
Speaker #1: Welcome to the Rambus Q4 and QY 2025 earnings conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session.
Operator: Welcome to the Rambus fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, you may press star one on your touchtone phone at any time. If anyone should require assistance during the conference, please press star zero at any time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Desmond Lynch, Chief Financial Officer. You may begin your conference.
Operator: Welcome to the Rambus fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, you may press star one on your touchtone phone at any time. If anyone should require assistance during the conference, please press star zero at any time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Desmond Lynch, Chief Financial Officer. You may begin your conference.
Speaker #1: If you would like to ask a question, you may press star one on your touch-tone phone at any time. If—if anyone should require assistance during the conference, please press star zero at any time.
Speaker #1: As a reminder, this conference call is being recorded. I would now like to turn the conference over to Desmond Lynch, Chief Financial Officer. You may begin your conference.
Speaker #2: Thank you, all three, too. And welcome to the Rambus Q4 and Q1 2025 results conference call. I am Desmond Lynch, Chief Financial Officer at Rambus, and on the call with me today is Luc Seraphin, our CEO.
Desmond Lynch: Thank you, operator, and welcome to the Rambus Fourth Quarter and Fiscal Year 2025 Results Conference Call. I am Desmond Lynch, Chief Financial Officer at Rambus, and on the call with me today is Luc Seraphin, our CEO. The press release for the results that we will be discussing today has been filed with the SEC on Form 8-K. We are webcasting this call along with the slides that we will reference during portions of today's call. A replay of this call can be accessed on our website beginning today at 5 PM Pacific Time. Our discussion today will contain forward-looking statements, including our expectations regarding projected financial results, financial prospects, market growth, demand for our solutions, other market factors, including reflections of the geopolitical and macroeconomic environment, and the effects of ASC 606 on reported revenue, amongst other items.
Desmond Lynch: Thank you, operator, and welcome to the Rambus Fourth Quarter and Fiscal Year 2025 Results Conference Call. I am Desmond Lynch, Chief Financial Officer at Rambus, and on the call with me today is Luc Seraphin, our CEO. The press release for the results that we will be discussing today has been filed with the SEC on Form 8-K. We are webcasting this call along with the slides that we will reference during portions of today's call. A replay of this call can be accessed on our website beginning today at 5 PM Pacific Time. Our discussion today will contain forward-looking statements, including our expectations regarding projected financial results, financial prospects, market growth, demand for our solutions, other market factors, including reflections of the geopolitical and macroeconomic environment, and the effects of ASC 606 on reported revenue, amongst other items.
Speaker #2: The press release for the results that we will be discussing today has been filed with the SEC on Form 8-K. We are webcasting this call, along with the slides that we will reference during portions of today's call.
Speaker #2: A replay of this call can be accessed on our website beginning today at 5:00 p.m. Pacific Time. Our discussion today will contain forward-looking statements, including our expectations regarding projected financial results, financial prospects, market growth, demand for our solutions, other market factors including reflections of the geopolitical and macroeconomic environment, and the effects of ASC 606 and reported revenue, among other items.
Speaker #2: These statements are subject to risks and uncertainties that may be discussed during this call and are more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs, and 10-Ks.
Desmond Lynch: These statements are subject to risks and uncertainties that may be discussed during this call and are more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs, and 10-Ks. These forward-looking statements may differ materially from our actual results, and we are under no obligation to update these statements. In an effort to provide greater clarity in the financials, we are using both GAAP and non-GAAP financial presentations in both our press release and on this call. A reconciliation of these non-GAAP financials to the most directly comparable GAAP measures has been included in our press release, in our slide presentation, and on our website at rambus.com on the Investor Relations page under Financial Releases. In addition, we will continue to provide operational metrics such as licensing billings to give our investors better insight into our operational performance.
These statements are subject to risks and uncertainties that may be discussed during this call and are more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs, and 10-Ks. These forward-looking statements may differ materially from our actual results, and we are under no obligation to update these statements. In an effort to provide greater clarity in the financials, we are using both GAAP and non-GAAP financial presentations in both our press release and on this call.
Speaker #2: These forward-looking statements may differ materially from our actual results, and we are under no obligation to update these statements. In an effort to provide greater clarity in the financials, we are using both GAAP and non-GAAP financial presentations in both our press release and on this call.
Speaker #2: A reconciliation of these non-GAAP financials to the most directly comparable GAAP measures has been included in our press release, in our slide presentation, and on our website at rambus.com on the investor relations page under financial releases.
A reconciliation of these non-GAAP financials to the most directly comparable GAAP measures has been included in our press release, in our slide presentation, and on our website at rambus.com on the Investor Relations page under Financial Releases. In addition, we will continue to provide operational metrics such as licensing billings to give our investors better insight into our operational performance. The order of our call today will be as follows: Luc will start with an overview of the business, I will discuss our financial results, and then we will end with Q&A. I'll now turn the call over to Luc to provide an overview of the quarter. Luc?
Speaker #2: In operational metrics such as addition, we will continue to provide licensing billings to give our investors better insight into our operational performance. The order of our call today will be as follows: Luc will start with an overview of the business.
Desmond Lynch: The order of our call today will be as follows: Luc will start with an overview of the business, I will discuss our financial results, and then we will end with Q&A. I'll now turn the call over to Luc to provide an overview of the quarter. Luc?
Speaker #2: I will discuss our financial results, and then we will end with Q&A. I'll now turn the call over to Luc to provide an overview of the
Speaker #2: quarter. Luc? Thank
Luc Seraphin: Thank you, Des. Good afternoon, everyone, and thank you for joining us. 2025 was an excellent year for Rambus. We closed with a strong Q4 and finished the full year with record revenue and earnings. Our financial success is a testament to both our strategy and execution as we continue to deliver products and technologies that accelerate memory, compute, and connectivity advancements in rapidly growing markets. Our diversified portfolio remains a core strength for the company, and each of our businesses contributed meaningfully to our results as we delivered a new annual high in cash from operations. This positions us well to continue to invest strategically in our product roadmap, expand our market opportunity, and drive long-term growth.
Luc Seraphin: Thank you, Des. Good afternoon, everyone, and thank you for joining us. 2025 was an excellent year for Rambus. We closed with a strong Q4 and finished the full year with record revenue and earnings. Our financial success is a testament to both our strategy and execution as we continue to deliver products and technologies that accelerate memory, compute, and connectivity advancements in rapidly growing markets. Our diversified portfolio remains a core strength for the company, and each of our businesses contributed meaningfully to our results as we delivered a new annual high in cash from operations. This positions us well to continue to invest strategically in our product roadmap, expand our market opportunity, and drive long-term growth.
Speaker #3: you, Des.
Speaker #2: Everyone, and thank you for joining us. 2025 was an excellent year for Rambus. We closed with a strong Q4 and finished the full year with record revenue and earnings.
Speaker #2: Our financial success is a testament to both our strategy and execution, as we continue to deliver products and technologies that accelerate memory, compute, and connectivity advancements in rapidly growing markets.
Speaker #2: Our diversified portfolio remains a core strength for the company, and each of our businesses contributed meaningfully to our results as we delivered a new annual high in cash from operations.
Speaker #2: These positions as well allow us to continue to invest strategically in our product roadmap, expand our market opportunity, and drive long-term growth. Before I go into detail on our business results, let me take a moment to discuss the important market and technology trends influencing our strategy and highlight several of our key accomplishments in 2025.
Luc Seraphin: Before I go into detail on our business results, let me take a moment to discuss the important market and technology trends influencing our strategy and highlight several of our key accomplishments in 2025. Both AI and traditional server markets remained strong throughout the year, driven by the accelerating need for significantly higher compute and memory performance. As workloads become more complex and diverse, and inference rapidly expands across applications, including agentic and physical AI, the demands placed on memory subsystems continue to intensify. This environment drove further adoption of DDR5, as well as other high-performance memory and interconnect technologies, where Rambus signal and power integrity expertise are foundational.... The accelerated pace of innovation continued across the industry, with customers increasingly operating on one-year product cadences to stay ahead of demand for greater performance.
Before I go into detail on our business results, let me take a moment to discuss the important market and technology trends influencing our strategy and highlight several of our key accomplishments in 2025. Both AI and traditional server markets remained strong throughout the year, driven by the accelerating need for significantly higher compute and memory performance. As workloads become more complex and diverse, and inference rapidly expands across applications, including agentic and physical AI, the demands placed on memory subsystems continue to intensify.
Speaker #2: Both AI and traditional server markets remain strong throughout the year, driven by the accelerating need for significantly higher compute and memory performance. As workloads become more complex and diverse, and inference rapidly expands across applications, including agentic and physical AI, the demands placed on memory subsystems continue to intensify.
This environment drove further adoption of DDR5, as well as other high-performance memory and interconnect technologies, where Rambus signal and power integrity expertise are foundational.... The accelerated pace of innovation continued across the industry, with customers increasingly operating on one-year product cadences to stay ahead of demand for greater performance.
Speaker #2: This environment draws further adoption of DDR5, as well as other high-performance memory and interconnect technologies, where Rambus signal and power integrity expertise are foundational.
Speaker #2: The accelerated pace of innovation continued across the industry, with customers increasingly operating on one-year product cadences to stay ahead of demand for greater performance.
Speaker #2: This dynamic amplified the need for cutting-edge merchant and custom solutions, where our advanced technology portfolio enables accelerated design cycles for our customers. Against this backdrop, Rambus had a number of achievements that fueled our performance in 2025 and strengthened our position across key markets as we move into 2026.
Luc Seraphin: This dynamic amplified the need for cutting-edge merchant and custom solutions, where our advanced technology portfolio enables accelerated design cycles for our customers. Against this backdrop, Rambus had a number of achievements that fueled our performance in 2025 and strengthened our position across key markets as we move into 2026. We furthered our leadership in DDR5 with increased market share in RCDs, reflecting both the depth of our expertise and the continued trust of our customers. Our power management chips made meaningful progress, with growing adoption of our DDR5 PMICs contributing to revenue growth. We extended our reach in high performance and AI PCs through the introduction of our complete client chipset. With this addition, Rambus offers a comprehensive chipset portfolio that supports all JEDEC standard DDR5 and LPDDR5 modules across server and client systems.
This dynamic amplified the need for cutting-edge merchant and custom solutions, where our advanced technology portfolio enables accelerated design cycles for our customers. Against this backdrop, Rambus had a number of achievements that fueled our performance in 2025 and strengthened our position across key markets as we move into 2026. We furthered our leadership in DDR5 with increased market share in RCDs, reflecting both the depth of our expertise and the continued trust of our customers.
Speaker #2: We furthered our leadership in DDR5 with increased market share in RCDs, reflecting both the depth of our expertise and the continued trust of our customers.
Speaker #2: Our power management chips made meaningful progress, with growing adoption of our DDR5 PMIX contributing to revenue growth. We extended our reach in high-performance and AI PCs through the introduction of our complete client chipset.
Our power management chips made meaningful progress, with growing adoption of our DDR5 PMICs contributing to revenue growth. We extended our reach in high performance and AI PCs through the introduction of our complete client chipset. With this addition, Rambus offers a comprehensive chipset portfolio that supports all JEDEC standard DDR5 and LPDDR5 modules across server and client systems.
Speaker #2: With this addition, Rambus offers a comprehensive chipset portfolio that supports all JEDEC standard DDR5 and LPDDR5 modules across server and client systems. With that, we offer customers greater assurance of interoperability and reliable performance at scale.
Luc Seraphin: With that, we offer customers greater assurance of interoperability and reliable performance at scale. And finally, in addition to these chip milestones, we saw increasing design wins and customer engagement led by our latest generation, HBM4, GDDR7, and PCIe 7 digital IP, as well as our broad range of security IP to safeguard data transmission and storage. Turning now to our quarterly business results. Chip capped off the year with a strong Q4 performance, delivering product revenue of $97 million. This brought us to a new annual record of $348 million, which was up 41% year-over-year. This achievement reflects our continued product leadership and ongoing market share gains in DDR5 RCDs. In addition, customer adoption of new products continues to progress, with growing revenue contributions and volume shipments on the way.
With that, we offer customers greater assurance of interoperability and reliable performance at scale. And finally, in addition to these chip milestones, we saw increasing design wins and customer engagement led by our latest generation, HBM4, GDDR7, and PCIe 7 digital IP, as well as our broad range of security IP to safeguard data transmission and storage. Turning now to our quarterly business results. Chip capped off the year with a strong Q4 performance, delivering product revenue of $97 million. This brought us to a new annual record of $348 million, which was up 41% year-over-year. This achievement reflects our continued product leadership and ongoing market share gains in DDR5 RCDs. In addition, customer adoption of new products continues to progress, with growing revenue contributions and volume shipments on the way.
Speaker #2: And finally, in addition to these chip milestones, we saw increasing design wins and customer engagement led by our latest-generation HBM4, GDDR7, and PCIe 7 digital IP, as well as our broad range of security IP to safeguard data transmission and storage.
Speaker #2: Turning now to our quarterly business results, chip capped off the year with a strong Q4 performance, delivering product revenue of $97 million. This brought us to a new annual record of million.
Speaker #2: Which was up 41% year over year. This achievement reflects our continued product leadership and ongoing market share gains in DDR5 RCDs. In addition, customer adoption is progressing, with growing revenue contributions and volume shipments underway.
Luc Seraphin: For Silicon IP, we are strategically focused on delivering industry-leading solutions that empower the next wave of AI hardware. The increasing pace and diversity of AI chip designs, including custom silicon for hyperscalers, is driving design wins for high-speed memory, interconnect, and security IP. With market leadership and expertise across multiple generations of HBM, GDDR, and PCIe, as well as our best-in-class security solutions, our IP is a critical enabler of the performance required by AI workloads. We see strong traction across our portfolio of cutting-edge solutions. In particular, there's growing demand for our interface and security IP solutions as we see the increased need to move and secure data in scale-up and scale-out scenarios. Looking ahead, the ongoing expansion of AI and the transformation of the data center continues to reshape memory and interconnect requirements.
For Silicon IP, we are strategically focused on delivering industry-leading solutions that empower the next wave of AI hardware. The increasing pace and diversity of AI chip designs, including custom silicon for hyperscalers, is driving design wins for high-speed memory, interconnect, and security IP. With market leadership and expertise across multiple generations of HBM, GDDR, and PCIe, as well as our best-in-class security solutions, our IP is a critical enabler of the performance required by AI workloads. We see strong traction across our portfolio of cutting-edge solutions. In particular, there's growing demand for our interface and security IP solutions as we see the increased need to move and secure data in scale-up and scale-out scenarios. Looking ahead, the ongoing expansion of AI and the transformation of the data center continues to reshape memory and interconnect requirements.
Speaker #2: IP, we are strategically focused on new silicon products, continuing to deliver solutions that empower the next wave of AI hardware with industry-leading performance. The increasing pace and diversity of AI chip designs, including custom silicon for hyperscalers, is driving design wins for high-speed memory, interconnect, and security IP.
Speaker #2: With market leadership and expertise across multiple generations of HBM, GDDR, and PCIe security solutions, our IP is a critical enabler of the performance required by AI workloads.
Speaker #2: With this strong traction across our portfolio of cutting-edge solutions, in particular, there's growing demand for our interface and security IP solutions as we see the increased need to move and secure data in scale-up and scale-out ahead, the ongoing expansion of scenarios.
Speaker #2: AI and the transformation reshape memory and interconnect requirements. AI training and inference at scale are driving the data center's continued growth, looking at increased demand for bandwidth, capacity, and power efficiency. The expansion of agentic AI is catalyzing power-efficient performance.
Luc Seraphin: AI training and inference at scale are driving increased demand for bandwidth, capacity, and power-efficient performance. The expansion of agentic AI is catalyzing traditional CPU-based server demand and continues to drive the need for more DIMMs per system, higher speed interfaces, and sophisticated power management. Our product and IP sit at the core of this transition, enabling the massive compute infrastructure required for increasingly complex and diverse AI models. In addition, the rise of purpose-built systems and increasingly heterogeneous compute is accelerating the adoption of new memory architectures, higher data rates, and advanced security solutions. All of these trends play directly to Rambus' strengths, open opportunities to broaden our leadership across next-generation platforms, and reinforce the long-term tailwinds for our businesses. Rambus is well positioned to capitalize on these trends, and in 2026, we expect to grow faster than market.
AI training and inference at scale are driving increased demand for bandwidth, capacity, and power-efficient performance. The expansion of agentic AI is catalyzing traditional CPU-based server demand and continues to drive the need for more DIMMs per system, higher speed interfaces, and sophisticated power management. Our product and IP sit at the core of this transition, enabling the massive compute infrastructure required for increasingly complex and diverse AI models.
Speaker #2: Traditional CPU-based server demand continues to drive the need for more DIMMs per system, higher speed interfaces, and sophisticated power. The core of this transition enables the massive compute infrastructure required for increasingly complex and diverse AI models.
Speaker #2: In addition, the rise of purpose-built systems and increasingly heterogeneous compute is accelerating the adoption of new memory architectures; higher data management. rates; and advanced Our product and IPs sit at security solutions.
In addition, the rise of purpose-built systems and increasingly heterogeneous compute is accelerating the adoption of new memory architectures, higher data rates, and advanced security solutions. All of these trends play directly to Rambus' strengths, open opportunities to broaden our leadership across next-generation platforms, and reinforce the long-term tailwinds for our businesses. Rambus is well positioned to capitalize on these trends, and in 2026, we expect to grow faster than market.
Speaker #2: All of these trends play directly to Rambus' strength: open opportunities to broaden our leadership across next-generation platforms and reinforce the business's long-term tailwinds. Rambus is well-positioned to capitalize on these trends, and in 2026 we expect to grow faster than the market.
Speaker #2: Now, as reflected in our Q1 outlook, we experienced a one-time supply chain issue that will affect product revenue for Q1. The issue has been resolved in collaboration with our supply chain partners, and we expect our product business to return to strong growth in the second quarter.
Luc Seraphin: Now, as reflected in our Q1 outlook, we experienced a one-time supply chain issue that will affect product revenue for Q1. The issue is being resolved in collaboration with our supply chain partners, and we expect our product business to return to strong growth in the second quarter. Fueled by market share gains and the continued ramp of new products, I am confident in our long-term trajectory for 2026 and beyond. As always, I want to thank our customers, partners, and employees for their continued support. With that, I'll turn the call over to Dez to walk through the financials. Dez?
Now, as reflected in our Q1 outlook, we experienced a one-time supply chain issue that will affect product revenue for Q1. The issue is being resolved in collaboration with our supply chain partners, and we expect our product business to return to strong growth in the second quarter. Fueled by market share gains and the continued ramp of new products, I am confident in our long-term trajectory for 2026 and beyond. As always, I want to thank our customers, partners, and employees for their continued support. With that, I'll turn the call over to Dez to walk through the financials. Dez?
Speaker #2: Fueled by market share gains and the continued ramp of new products, I am confident in our long-term trajectory for 2026 and beyond. As always, I want to thank our customers, partners, and employees for their continued support.
Speaker #2: With that, I turn the call over to Des to walk through the financials. Des, thank you. Luke, I'd like to begin with a summary of our financial results for the fourth quarter and for the full year 2025 on slide three.
Desmond Lynch: Thank you, Luc. I'd like to begin with a summary of our financial results for the fourth quarter and for the full year 2025 on slide three. We delivered strong financial results in both the fourth quarter and full year 2025, as we continue to execute on our long-term growth strategy. Full year revenue and earnings per share reached record levels, driven by a 41% increase in product revenue to $348 million, due to DDR5 market share gains and new product contributions. In 2025, we generated a company record, $360 million in cash from operations, which was up 56% from 2024. An established track record of generating cash enables us to invest in initiatives that fuel our long-term growth. Let me now provide you a summary of our non-GAAP income statement on slide five.
Desmond Lynch: Thank you, Luc. I'd like to begin with a summary of our financial results for the fourth quarter and for the full year 2025 on slide three. We delivered strong financial results in both the fourth quarter and full year 2025, as we continue to execute on our long-term growth strategy. Full year revenue and earnings per share reached record levels, driven by a 41% increase in product revenue to $348 million, due to DDR5 market share gains and new product contributions. In 2025, we generated a company record, $360 million in cash from operations, which was up 56% from 2024. An established track record of generating cash enables us to invest in initiatives that fuel our long-term growth. Let me now provide you a summary of our non-GAAP income statement on slide five.
Speaker #2: We delivered strong financial results in both the fourth quarter and full year 2025, as we continue to execute on our long-term growth strategy. Full-year revenue and earnings per share reached record levels, driven by a 41% increase in product revenue to $348 million due to DDR5 market share gains and new product contributions.
Speaker #2: In 2025, we generated a company record $360 million in cash from operations, which was up 56% from 2024. Our established track record of generating cash enables us to invest in initiatives that fuel our long-term growth.
Speaker #2: Let me now provide you a summary of our non-GAAP income statement on slide five. Revenue for the fourth quarter was $190.2 million, which is above our expectations.
Desmond Lynch: Revenue for the fourth quarter was $190.2 million, which is above our expectations. Royalty revenue was $71.7 million, while licensing billings were $71.5 million. Product revenue was $96.8 million, as we delivered another quarter of record product revenue. This represents 32% year-over-year growth, driven by continued strength in DDR5 products and ramping new product contributions. For the full year, we delivered $347.8 million in product revenue, which was a new annual record for the company. Contract and other revenue was $21.8 million, consisting predominantly of Silicon IP. As a reminder, only a portion of our Silicon IP revenue is reflected in contract and other revenue, and the remaining portion is reported in royalty revenue, as well as in licensing billings.
Revenue for the fourth quarter was $190.2 million, which is above our expectations. Royalty revenue was $71.7 million, while licensing billings were $71.5 million. Product revenue was $96.8 million, as we delivered another quarter of record product revenue. This represents 32% year-over-year growth, driven by continued strength in DDR5 products and ramping new product contributions. For the full year, we delivered $347.8 million in product revenue, which was a new annual record for the company. Contract and other revenue was $21.8 million, consisting predominantly of Silicon IP. As a reminder, only a portion of our Silicon IP revenue is reflected in contract and other revenue, and the remaining portion is reported in royalty revenue, as well as in licensing billings.
Speaker #2: Royalty revenue was $71.7 million, while licensing billings were $71.5 million. Product revenue was $96.8 million, as we delivered another quarter of record product revenue.
Speaker #2: This represents 32% year-over-year growth, driven by continued strength in DDR5 products and ramping new product contributions. For the full year, we delivered $347.8 million in product revenue, which was a new annual record for the company.
Speaker #2: Contract and other revenue was $21.8 million, consisting predominantly of silicon IP. As a reminder, only a portion of our silicon IP revenue is reflected in contract and other revenue, and the remaining portion is reported in royalty revenue, as well as in licensing billings.
Speaker #2: Total operating costs, including cost of goods sold for the quarter, were $103.2 million. Operating expenses of $64.9 million were in line with our Q3.
Desmond Lynch: Total operating costs, including costs of goods sold for the quarter, were $103.2 million. Operating expenses of $64.9 million were in line with our expectations and flat compared to Q3. Interest and other income for the fourth quarter was $6.4 million. Using an assumed flat tax rate of 20% for non-GAAP pre-tax income, non-GAAP net income for the quarter was $74.7 million. Now, let me turn to the balance sheet details on slide 6. We ended the quarter with cash, cash equivalents, and marketable securities totaling $761.8 million, up from Q3, primarily driven by record cash from operations of $99.8 million. Fourth quarter capital expenditures were $8.6 million, while depreciation expense was $8.4 million.
Total operating costs, including costs of goods sold for the quarter, were $103.2 million. Operating expenses of $64.9 million were in line with our expectations and flat compared to Q3. Interest and other income for the fourth quarter was $6.4 million. Using an assumed flat tax rate of 20% for non-GAAP pre-tax income, non-GAAP net income for the quarter was $74.7 million. Now, let me turn to the balance sheet details on slide 6. We ended the quarter with cash, cash equivalents, and marketable securities totaling $761.8 million, up from Q3, primarily driven by record cash from operations of $99.8 million. Fourth quarter capital expenditures were $8.6 million, while depreciation expense was $8.4 million.
Speaker #2: Interest and other income for the fourth quarter was $6.4 million and was flat compared to expectations. Using an assumed flat tax rate of 20% for non-GAAP pre-tax income, non-GAAP net income for the quarter was $74.7 million.
Speaker #2: Now, let me turn to the balance sheet details on slide six. We ended the quarter with cash, cash equivalents, and marketable securities totaling $761.8 million, up from Q3, primarily driven by record cash from operations.
Speaker #2: Quarter capital expenditures were $8.6 million, while depreciation expense was $8.4 million. Free cash flow in the quarter was $72.5 million, and for the full year, $320.9 million, or we delivered strong free cash flow margin.
Desmond Lynch: Free cash flow in the quarter was $91.2 million, and for the full year, we delivered $320.9 million or 45% free cash flow margin. Let me now review our non-GAAP outlook for Q1 on slide 7. As a reminder, the forward-looking guidance reflects our best estimates at this time, and our actual results could differ materially from what I'm about to review. In addition to the non-GAAP financial outlook under ASC 606, we also provide information on licensing billings, which is an operational metric that reflects amounts invoiced to our licensing customers during the period, adjusted for certain differences. We expect revenue in Q1 to be between $172 million and $178 million.
Free cash flow in the quarter was $91.2 million, and for the full year, we delivered $320.9 million or 45% free cash flow margin. Let me now review our non-GAAP outlook for Q1 on slide 7. As a reminder, the forward-looking guidance reflects our best estimates at this time, and our actual results could differ materially from what I'm about to review. In addition to the non-GAAP financial outlook under ASC 606, we also provide information on licensing billings, which is an operational metric that reflects amounts invoiced to our licensing customers during the period, adjusted for certain differences. We expect revenue in Q1 to be between $172 million and $178 million.
Speaker #2: Let me now review our non-GAAP outlook for the first quarter on slide seven. As a reminder, the forward-looking guidance reflects our best estimates at this time, and our actual results could differ materially from what 45% free cash review.
Speaker #2: In addition to the non-GAAP financial outlook under, and I’m about to say, ASC 606, we also provide information on licensing billings, which is an operational metric that reflects amounts invoiced to our licensing customers during the period, adjusted for certain differences.
Speaker #2: We expect Q1 revenue to be between $172 million and $178 million. Royalty revenue is expected to be between $61 million and $67 million. Licensing billings are expected to be between $66 million and $72 million.
Desmond Lynch: We expect royalty revenue to be between $61 and $67 million, and licensing billings between $66 and $72 million. As Luc mentioned earlier, our Q1 product revenue is impacted by a supply chain issue, which has been resolved, and we expect resumption of growth from the second quarter onwards. We expect Q1 non-GAAP total operating costs, which includes COGS, to be between $104 and $100 million. We expect Q1 capital expenditures to be approximately $13 million. Non-GAAP operating results for the first quarter are expected to be between a profit of $68 and $78 million. For non-GAAP interest and other income and expense, we expect $6 million of interest income. We expect that our pro forma tax rate for 2026 will be 16%, driven by tax legislation changes last year.
We expect royalty revenue to be between $61 and $67 million, and licensing billings between $66 and $72 million. As Luc mentioned earlier, our Q1 product revenue is impacted by a supply chain issue, which has been resolved, and we expect resumption of growth from the second quarter onwards. We expect Q1 non-GAAP total operating costs, which includes COGS, to be between $104 and $100 million. We expect Q1 capital expenditures to be approximately $13 million. Non-GAAP operating results for the first quarter are expected to be between a profit of $68 and $78 million. For non-GAAP interest and other income and expense, we expect $6 million of interest income. We expect that our pro forma tax rate for 2026 will be 16%, driven by tax legislation changes last year.
Speaker #2: As Luke mentioned earlier, our Q1 product revenue is impacted by a supply chain issue, which has been resolved, and we expect resumption of growth from the second quarter onwards.
Speaker #2: We expect Q1 non-GAAP total operating costs, which includes COGS, to be between $104 million and $100 million. We expect Q1 capital expenditures to be approximately $13 million.
Speaker #2: Non-GAAP operating results for the first quarter are expected to be between a profit of $68 and $78 million. For non-GAAP interest and other income and expense, we have income.
Speaker #2: We expect that our pro forma tax rate for 2026 will be 16%, driven by tax legislation changes last year. We expect non-GAAP tax expenses to be between $11.8 million and $13.4 million in Q1.
Desmond Lynch: We expect non-GAAP tax expenses to be between $11.8 and 13.4 million in Q1. We expect Q1 share count to be 110 million diluted shares outstanding. Overall, we anticipate the Q1 non-GAAP earnings per share range between $0.56 and 0.64. Let me finish with a summary on slide 8. In closing, I am pleased with our excellent 2025 financial performance and the continued progress we are making against our strategic goals. We delivered record top-line revenue growth, resulting in record profitability and cash generation. Our diversified portfolio continues to be a core strength for the company. First, patent licensing continues to deliver consistent and predictable results. Also, our silicon IP portfolio is well positioned to address the accelerating demand for AI solutions.
We expect non-GAAP tax expenses to be between $11.8 and 13.4 million in Q1. We expect Q1 share count to be 110 million diluted shares outstanding. Overall, we anticipate the Q1 non-GAAP earnings per share range between $0.56 and 0.64. Let me finish with a summary on slide 8. In closing, I am pleased with our excellent 2025 financial performance and the continued progress we are making against our strategic goals. We delivered record top-line revenue growth, resulting in record profitability and cash generation. Our diversified portfolio continues to be a core strength for the company. First, patent licensing continues to deliver consistent and predictable results. Also, our silicon IP portfolio is well positioned to address the accelerating demand for AI solutions.
Speaker #2: We expect Q1 share count to be 110 million diluted shares outstanding. Overall, we anticipate the Q1 non-GAAP earnings per share to range between $56 and $64.
Speaker #2: Let me finish with a summary on slide eight. In closing, I am pleased with our excellent 2025 financial performance and the continued progress we are making against our strategic goals.
Speaker #2: We recorded top-line revenue growth, resulting in record profitability and cash generation. Our diversified portfolio continues to be a core strength for the company. We delivered—first, patent licensing continues to deliver consistent and, also, our silicon IP produces predictable results.
Speaker #2: Our solutions portfolio is well positioned to address business, and continues to drive our growth with gains in our core RCD, strong leadership, and market share business, which is complemented by our expanding new product contributions.
Desmond Lynch: In addition, our product business continues to drive our growth with strong leadership and market share gains in our core RCD business, which is complemented by our expanding new product contributions. Overall, we are well positioned to drive long-term shareholder value. Before I open up the call to Q&A, I would like to thank our employees for their continued teamwork and execution. With that, I'll turn the call back to our operator to begin Q&A. Could we have our first question?
In addition, our product business continues to drive our growth with strong leadership and market share gains in our core RCD business, which is complemented by our expanding new product contributions. Overall, we are well positioned to drive long-term shareholder value. Before I open up the call to Q&A, I would like to thank our employees for their continued teamwork and execution. With that, I'll turn the call back to our operator to begin Q&A. Could we have our first question?
Speaker #2: Overall, we are well positioned to drive long-term shareholder value. Before I open up the call to Q&A, I would like to thank our employees for their continued teamwork and execution.
Speaker #2: With that, I'll turn the call back to our operator to begin Q&A. Could we have our first question? Thank you. Ladies and gentlemen, if you have a question, please press star one on your touch-tone phone.
Operator: Thank you. Ladies and gentlemen, if you have a question, please press star one on your touchtone phone. The first question comes from Kevin Cassidy with Rosenblatt. You may proceed.
Operator: Thank you. Ladies and gentlemen, if you have a question, please press star one on your touchtone phone. The first question comes from Kevin Cassidy with Rosenblatt. You may proceed.
Speaker #2: From Kevin Cassidy with Rosenblatt. The first question comes—you may
Speaker #2: Proceed. Yes, thanks for taking my—
Kevin Cassidy: Yes, thanks for taking my question, and congratulations on the great results. But of course, the questions will be around the supply chain issue. I understand you; you've resolved the issue. Will there be catch up on, meaning in Q2 can you make up for that revenue loss in Q1, or is that just lost to market share that on a competitor picking up the business?
Kevin Cassidy: Yes, thanks for taking my question, and congratulations on the great results. But of course, the questions will be around the supply chain issue. I understand you; you've resolved the issue. Will there be catch up on, meaning in Q2 can you make up for that revenue loss in Q1, or is that just lost to market share that on a competitor picking up the business?
Speaker #3: Question, and congratulations on the great results. But of course, the questions will be around the supply chain issue. I understand you've resolved the issue; will there be catch-up on meaning in the second quarter?
Speaker #3: Make up for that revenue loss in the first quarter, or is that just share a competitor picking up the lost market? Can you—
Luc Seraphin: Thank you, Kevin. Let me maybe take a few minutes to explain what the supply issue is, so that we understand the dynamics in the market. So in Q4, we, as we said, we identified a back-end manufacturing issue with one of our OSATs. We have identified the root cause of that issue, and we have implemented all the corrective actions in collaboration with our supply chain partners. And before I go into a detail, note that the issue was affecting an extremely low number of parts, which made the identification of the root cause a bit difficult because it was hard to reproduce. But we have identified the root cause. We've put the measures in place. And in reality, what we've done is we've done two things.
Luc Seraphin: Thank you, Kevin. Let me maybe take a few minutes to explain what the supply issue is, so that we understand the dynamics in the market. So in Q4, we, as we said, we identified a back-end manufacturing issue with one of our OSATs. We have identified the root cause of that issue, and we have implemented all the corrective actions in collaboration with our supply chain partners. And before I go into a detail, note that the issue was affecting an extremely low number of parts, which made the identification of the root cause a bit difficult because it was hard to reproduce. But we have identified the root cause. We've put the measures in place. And in reality, what we've done is we've done two things.
Speaker #4: Kevin, thank you. Let me maybe take a few minutes to explain what the supply issue is so that we understand the dynamics in the market.
Speaker #4: So in Q4, as we said, we identified a back-end manufacturing issue with one of our OSATs. We have identified the root cause of that issue, and we have implemented all the corrective actions in collaboration with our supply chain partners.
Speaker #4: And before I go, note that the issue was in the detail, affecting an extremely low number of parts, which made it hard to reproduce.
Speaker #4: We have identified the root cause. We've put--but we--the measures in place, and in reality, what we've done is we've done two things. The first thing we've identified and the corrective actions done is once the root cause was--were in place, we did inventory that was originally staged for Q1 to meet our Q4, actually pull forward fresh material from--remained very strong in Q4.
Luc Seraphin: The first thing we've done is, once the root cause was identified and the corrective actions were in place, we did actually pull forward fresh material from inventory that was originally staged for Q1 to meet our Q4 customer demand, because our customer demand remained very strong in Q4. So that's the first thing we did. We accelerated fresh material once these measures were in place. The second thing we did is, despite the very, very low PPMs that we observed, and because quality is paramount, out of abundance of precaution, we actually quarantined all potentially impacted production material, and now we're retesting this material with enhanced screens in place. So these measures have put additional strain on capacity in a tighter supply environment, and that impacts, you know, Q1, as we said. But the issue was identified in Q4.
The first thing we've done is, once the root cause was identified and the corrective actions were in place, we did actually pull forward fresh material from inventory that was originally staged for Q1 to meet our Q4 customer demand, because our customer demand remained very strong in Q4. So that's the first thing we did. We accelerated fresh material once these measures were in place. The second thing we did is, despite the very, very low PPMs that we observed, and because quality is paramount, out of abundance of precaution, we actually quarantined all potentially impacted production material, and now we're retesting this material with enhanced screens in place. So these measures have put additional strain on capacity in a tighter supply environment, and that impacts, you know, Q1, as we said. But the issue was identified in Q4.
Speaker #4: So that's the first thing we did. We saw customer demand because our customer demand accelerated fresh material once these measures were in place. Despite the very, very low—The second thing we did is PPMs that we observed, and because quality is paramount, out of an abundance of precaution, we actually quarantined all potentially impacted production material.
Speaker #4: And now we are retesting these materials with enhanced screens in place. So these measures have put additional strain on capacity, in a tight-to-supply environment, and that impacts Q1, as we said.
Speaker #4: But the issue was identified in Q4. We accelerated material through after we put the measures in place, and we are rescreening parts, and that's what's creating that issue in Q1.
Luc Seraphin: We accelerated material through, you know, after we put the measures in place. We are rescreening parts that, you know, were potentially tainted, and that's what's creating that issue in Q1. So that issue is behind us, and the lower Q1 product revenue does not change the trajectory of the business. You know, we expect the business to return to strong growth in Q2, and the product revenue for 2026 remain on track to grow faster than market. And, you know, that's, that's how I would qualify the issue. Dez, I don't know whether you want to add anything to this.
We accelerated material through, you know, after we put the measures in place. We are rescreening parts that, you know, were potentially tainted, and that's what's creating that issue in Q1. So that issue is behind us, and the lower Q1 product revenue does not change the trajectory of the business. You know, we expect the business to return to strong growth in Q2, and the product revenue for 2026 remain on track to grow faster than market. And, you know, that's, that's how I would qualify the issue. Dez, I don't know whether you want to add anything to this.
Speaker #4: The issue is behind us. And the lower Q1 product revenue does not change the trajectory of the business. We expect the business in Q2. And the product revenue for 2026 remained on that track to grow faster than the market.
Speaker #4: And that's how I would qualify the issue. I don't know whether we want to add anything to that or were potentially tainted. This.
Speaker #5: No, I think you summarized it well. Look, the issue in Q1 is behind us, and we're expecting strong recovery both in Q2 and also for the full year.
Desmond Lynch: No, I think you summarized it well, Luc. You know, the issue in Q1 is behind us, and we're expecting strong recovery both in Q2 and also for the full year. And as you said, we do expect the business to grow faster than market for the year, so we're very well positioned, from here.
Desmond Lynch: No, I think you summarized it well, Luc. You know, the issue in Q1 is behind us, and we're expecting strong recovery both in Q2 and also for the full year. And as you said, we do expect the business to grow faster than market for the year, so we're very well positioned, from here.
Speaker #5: the business to grow faster than the market for the year. So we're very well positioned from, and as you said, we do expect
Speaker #5: here. Okay, great.
Kevin Cassidy: Okay, great. Thanks for that detailed explanation. You know, maybe a more difficult question, but what... Can you quantify what the revenue would have been?
Kevin Cassidy: Okay, great. Thanks for that detailed explanation. You know, maybe a more difficult question, but what... Can you quantify what the revenue would have been?
Speaker #3: Thanks for that detailed explanation. Maybe a more difficult question, but can you quantify what the revenue would have been?
Speaker #3: been?
Speaker #4: Hi, Kevin. It's
Desmond Lynch: Hi, Kevin, it's Dez. You know, what I would say is that, you know, the impact would probably have been around $ low double-digit million impact in what's already a seasonally soft quarter for the business. So that's how I would sort of quantify the sort of Q1 revenue impact from there. As Luc mentioned, you know, we will build inventory by the end of sort of Q1, and we'll be in a position to return to strong growth in Q2 from there. But I would say quantification, probably in the $ low double-digit million impact is what I would say, Kevin.
Desmond Lynch: Hi, Kevin, it's Dez. You know, what I would say is that, you know, the impact would probably have been around $ low double-digit million impact in what's already a seasonally soft quarter for the business. So that's how I would sort of quantify the sort of Q1 revenue impact from there. As Luc mentioned, you know, we will build inventory by the end of sort of Q1, and we'll be in a position to return to strong growth in Q2 from there. But I would say quantification, probably in the $ low double-digit million impact is what I would say, Kevin.
Speaker #4: that the impact would probably have Des. been around low double-digit What I would say is million impact in what's already a seasonally soft quarter for the business.
Speaker #4: So that's how I would sort of quantify the sort of Q1 revenue impact from there. As Luke mentioned, we are we will build inventory by the end of sort of Q1, and we'll be in a position to return to strong growth in Q2 from there.
Speaker #4: But I would say quantification, probably in the low double-digit million impact, is what I would say, Kevin.
Speaker #3: Okay, great. Thank you for that help.
Kevin Cassidy: Okay, great. Thank you for that help.
Kevin Cassidy: Okay, great. Thank you for that help.
Speaker #4: Thanks,
Desmond Lynch: Thanks, Kevin.
Desmond Lynch: Thanks, Kevin.
Speaker #4: Kevin. Thank you.
Operator: Thank you. The following comes from Kevin Garrigan with Jefferies. You may proceed.
Operator: Thank you. The following comes from Kevin Garrigan with Jefferies. You may proceed.
Speaker #2: The following comes from Kevin Geer again with Jefferies. You may proceed.
Speaker #6: Yeah, hey, guys. Thanks for taking my question. Hey, can you just talk about how your RCD market share finished for—
Kevin Garrigan: Yeah. Hey, hey, guys, thanks for taking my question. Hey, can you just talk about how your RCD market share finished for 2025?
Kevin Garrigan: Yeah. Hey, hey, guys, thanks for taking my question. Hey, can you just talk about how your RCD market share finished for 2025?
Speaker #6: 2025? Yes, thanks,
Luc Seraphin: Yes. Thanks, Kevin. So, you know, we believe that we ended up the year in the mid-40% share, you know, for DDR5. We thought the market, you know, between 2024 and 2025, you know, grew mid-single digit, but the portion of DDR5 became more important. You know, DDR4 continues to decrease in terms of share. So, you know, in 2024, we were in the early 40s for DDR5. You know, in 2025, we believe we are in the mid-40s on DDR5, we're in a market where DDR5 dominates even more. And I think, as we said on the prepared remarks, you know, we expect to continue to grow faster than market in 2026, despite the glitch we had in Q1.
Luc Seraphin: Yes. Thanks, Kevin. So, you know, we believe that we ended up the year in the mid-40% share, you know, for DDR5. We thought the market, you know, between 2024 and 2025, you know, grew mid-single digit, but the portion of DDR5 became more important. You know, DDR4 continues to decrease in terms of share. So, you know, in 2024, we were in the early 40s for DDR5. You know, in 2025, we believe we are in the mid-40s on DDR5, we're in a market where DDR5 dominates even more. And I think, as we said on the prepared remarks, you know, we expect to continue to grow faster than market in 2026, despite the glitch we had in Q1.
Speaker #4: Kevin. So, we believe that we ended up the year in the mid-40% share for DDR5. We thought the market between '24 and '25 grew mid-single digit.
Speaker #4: DDR5 became more important. DDR4 continued to decrease in terms of share. So, in 2024, we were in the early 40s for DDR5.
Speaker #4: In 2025, we believe we are in the mid-40s on DDR5 in a market where DDR5 dominates even more. And I think, as we said in the prepared remarks, we expect to continue to grow faster than the market in 2026 despite the glitch we had in—
Speaker #4: Q1. Okay, perfect.
Bastian Falken: Okay, perfect. I appreciate that color. And then, just as a follow-up, so there's a lot going on with, you know, the Intel Diamond Rapids platform and, you know, even the AMD Venice platform. So just kind of wondering if the timeline and opportunity that you're expecting on the MRDIMM front hasn't changed at all?
Kevin Garrigan: Okay, perfect. I appreciate that color. And then, just as a follow-up, so there's a lot going on with, you know, the Intel Diamond Rapids platform and, you know, even the AMD Venice platform. So just kind of wondering if the timeline and opportunity that you're expecting on the MRDIMM front hasn't changed at all?
Speaker #6: I appreciate that color. And then, just as a follow-up, so there's a lot going on with the Intel Diamond Rapids platform and even the AMD Venice platform.
Speaker #6: So just kind of wondering if the timeline and opportunity that you're expecting on the MR DIMM front hasn't changed at all.
Speaker #6: all. Thanks,
Luc Seraphin: Thanks, Kevin. No, it hasn't. We are monitoring, you know, the rollout of these platforms, as every generation has been, you know, the same dynamic. You know, the rollout of our products, you know, mostly depend on the rollout of the platforms from Intel and AMD. So, you know, we expect our MRDIMM to ramp towards, you know, the very end of the year at this point in time. But we will modulate that based on, you know, how the platforms roll out from both Intel and AMD are happening. I think that's nothing new. This has happened in every generation in the past. We are, you know, readying our products. We are working with the ecosystem to make sure that we are ready.
Luc Seraphin: Thanks, Kevin. No, it hasn't. We are monitoring, you know, the rollout of these platforms, as every generation has been, you know, the same dynamic. You know, the rollout of our products, you know, mostly depend on the rollout of the platforms from Intel and AMD. So, you know, we expect our MRDIMM to ramp towards, you know, the very end of the year at this point in time.
Speaker #4: Kevin, no, it hasn't. We are monitoring the rollout of these platforms, as every generation has had the same dynamic. The rollout of our products mostly depends on the rollout of the platforms from Intel and AMD.
Speaker #4: So we expect our MR DIMM to ramp towards the very end of the year at this point in time. But we will modulate that based on how the platforms rollout from both Intel and AMD are happening.
But we will modulate that based on, you know, how the platforms roll out from both Intel and AMD are happening. I think that's nothing new. This has happened in every generation in the past. We are, you know, readying our products. We are working with the ecosystem to make sure that we are ready. But eventually, you know, that will depend on when those platforms roll out. As far as we're concerned, you know, we are, you know, we are ready.
Speaker #4: I think that's nothing new. This has happened in every generation in the past. We are readying our products. We are working with the ecosystem.
Speaker #4: To make sure that we are ready, but eventually that will depend on when those platforms roll out. As far as we're concerned, we are
Luc Seraphin: But eventually, you know, that will depend on when those platforms roll out. As far as we're concerned, you know, we are, you know, we are ready.
Speaker #4: ready. Okay, perfect.
Bastian Falken: Okay, perfect. I appreciate the color, and congrats on the results.
Kevin Garrigan: Okay, perfect. I appreciate the color, and congrats on the results.
Speaker #6: I appreciate the color, and congrats on the quarter.
Speaker #6: results. Thank
Speaker #4: you. Thank you.
Luc Seraphin: Thank you.
Luc Seraphin: Thank you.
Operator: Thank you. The next question comes from Aaron Rakers with Wells Fargo. You may proceed.
Operator: Thank you. The next question comes from Aaron Rakers with Wells Fargo. You may proceed.
Speaker #2: The next question comes from Aaron Rakers with Wells Fargo. You may proceed.
Speaker #4: Yeah, thanks for taking the questions. I've got a couple, if I can, as well. I guess, first of all, going back to the supply chain issue—yeah, I can appreciate the issues have been rectified.
Aaron Rakers: Yeah, thanks for taking the questions. I've got a couple, if I can, as well. I guess, first of all, going back to the supply chain issue, yeah, I can appreciate, you know, that the issues have been rectified. I know, Luc, you've referenced a couple of times growing faster than the market. So, you know, I guess the question I have is: How do you define the growth rate of the market? We've seen a lot of data points where server demand looks like it might be as much as mid-teens, maybe even high teens in some of the commentary recently. So I'm curious if you can just kind of contextualize what you think the market growth rate is, in 2026, you know, underpinning your expectation of growing faster than that.
Aaron Rakers: Yeah, thanks for taking the questions. I've got a couple, if I can, as well. I guess, first of all, going back to the supply chain issue, yeah, I can appreciate, you know, that the issues have been rectified. I know, Luc, you've referenced a couple of times growing faster than the market. So, you know, I guess the question I have is: How do you define the growth rate of the market? We've seen a lot of data points where server demand looks like it might be as much as mid-teens, maybe even high teens in some of the commentary recently. So I'm curious if you can just kind of contextualize what you think the market growth rate is, in 2026, you know, underpinning your expectation of growing faster than that.
Speaker #4: I know, Luke, you've referenced a couple of times growing faster than the market. So I guess the question I have is, how do you define the growth rate of the market?
Speaker #4: We've seen a lot of data points where server demand looks like it might be as much as mid-teens, maybe even high teens in some of the commentary recently.
Speaker #4: We've seen a lot of data points where server demand looks like it might be as much as mid-teens, maybe even high-teens, in some of the commentary recently. Curious if you can just kind of contextualize what sort of market growth rate you think is in 2026 underpinning your expectation of growing faster than that.
Speaker #4: Yeah, thanks, Aaron. We see a wide range of numbers for the market growth. Typically, as you know, there are many variables going into this. One of the bases is really the market for servers.
Luc Seraphin: Yeah. Thanks, Aaron. You know, we see a wide range of numbers, you know, for the market growth. You know, typically, as you know, there are many variables going into this. You know, one of the basics is really the market for servers. You know, the analysts, the marketing analysts, you know, have a range, you know, for market servers. Gartner is at 8%. You know, we hear from other sources that, you know, this could be, as you said, you know, double-digit growth. But, you know, we wanna stay prudent with the view of the server growth.
Luc Seraphin: Yeah. Thanks, Aaron. You know, we see a wide range of numbers, you know, for the market growth. You know, typically, as you know, there are many variables going into this. You know, one of the basics is really the market for servers. You know, the analysts, the marketing analysts, you know, have a range, you know, for market servers. Gartner is at 8%. You know, we hear from other sources that, you know, this could be, as you said, you know, double-digit growth. But, you know, we wanna stay prudent with the view of the server growth.
Speaker #4: The analysts, the marketing analysts, have a range for market servers. Gartner is at 8%. We hear from other sources that this could be, as you said, double-digit growth.
Speaker #4: But we want to stay prudent with the view of the server growth, because we believe the demand is here. But I think some people tend to underestimate the impact of a potential shortage.
Luc Seraphin: Because we believe the demand is here, but I think, you know, some people tend to underestimate the impact of potential shortage, you know, especially on the memory side. So, you know, we tend to align with Gartner's view, with, you know, 8% market growth for the servers. So we certainly, you know, exceed that, but you have other things happening. You know, the number of channels increasing, you know, the introduction of new platforms. You know, in our case, you know, we also are introducing our new products, so we're gonna be higher than that. But the basis we use is, you know, mid- to high-single-digit, you know, growth for the server market. That's our basis.
Because we believe the demand is here, but I think, you know, some people tend to underestimate the impact of potential shortage, you know, especially on the memory side. So, you know, we tend to align with Gartner's view, with, you know, 8% market growth for the servers. So we certainly, you know, exceed that, but you have other things happening. You know, the number of channels increasing, you know, the introduction of new platforms. You know, in our case, you know, we also are introducing our new products, so we're gonna be higher than that. But the basis we use is, you know, mid- to high-single-digit, you know, growth for the server market. That's our basis.
Speaker #4: Especially on the memory side. So we tend to align with Gartner's view, with 8% market growth for the servers. So we certainly exceed that.
Speaker #4: Things are happening. The number of channels is increasing. The introduction of new platforms. In our case, we are also introducing our new products.
Speaker #4: So we're going to be higher than that. But the basis we use is mid- to high-single-digit growth for the server market. That's our
Speaker #4: Basis. That's very okay, helpful. And, kind of sticking with that, when we talk about your companionship opportunities, I think last quarter you talked about the PMIC being, I want to say, with mid-single-digit contribution to your total product revenue.
Aaron Rakers: Okay. That's very helpful. And then, kind of sticking with that, when we talk about your complementary opportunities, I think last quarter you talked about the PMIC being, I wanna say, with mid-single digit contribution to your total product revenue. Can you unpack that a little bit? How fast is that growing? What's the expectations for this year? Thank you.
Aaron Rakers: Okay. That's very helpful. And then, kind of sticking with that, when we talk about your complementary opportunities, I think last quarter you talked about the PMIC being, I wanna say, with mid-single digit contribution to your total product revenue. Can you unpack that a little bit? How fast is that growing? What's the expectations for this year? Thank you.
Speaker #4: Can you unpack that a little bit? How fast is that growing? What’s the expectation for this year? Thank you. Hi, Aaron. It’s Keith here.
Desmond Lynch: Hi, Aaron, it's Dev here. We're really pleased with the progress and traction that our new products continue to make in the market. Our new products have grown from low single-digit contribution in the first half of 25 to upper single digits in Q4, which was in line with our expectations. As we look ahead to Q1, I do expect the strong traction really to continue, where I do expect the new products will continue to be... It'll grow to about double-digit contribution of total product revenue. We have traction across all of our products, but I would say that in terms of revenue contribution, PMIC remains the largest contributor there. Our customers continue to place value and importance of the interoperability between RCD and PMIC.
Desmond Lynch: Hi, Aaron, it's Dev here. We're really pleased with the progress and traction that our new products continue to make in the market. Our new products have grown from low single-digit contribution in the first half of 25 to upper single digits in Q4, which was in line with our expectations. As we look ahead to Q1, I do expect the strong traction really to continue, where I do expect the new products will continue to be... It'll grow to about double-digit contribution of total product revenue.
Speaker #4: We're really pleased with the progress and traction that our new products continue to make in the market. Our new products have grown from low single-digit contribution in the first half of '25 to upper single digits in Q4, which was in line with our expectations.
Speaker #4: If we look ahead to Q1, I do expect strong traction really to continue, where I do expect new products will continue to be—it’ll grow to about a double-digit contribution of total product revenue.
We have traction across all of our products, but I would say that in terms of revenue contribution, PMIC remains the largest contributor there. Our customers continue to place value and importance of the interoperability between RCD and PMIC. As we look ahead into sort of 2026, with the continued rollout of new platforms, I would say that our new products are very well positioned within the market to continue to grow and take market share.
Speaker #4: We have traction across all of our products, but I would say that, in terms of revenue contribution, PMIC remains the largest contributor there. Our customers continue to place value and importance on the interoperability between RCD and PMIC.
Desmond Lynch: As we look ahead into sort of 2026, with the continued rollout of new platforms, I would say that our new products are very well positioned within the market to continue to grow and take market share.
Speaker #4: And as we look ahead into sort of 2026, with the continued rollout of new platforms, I would say that our new products are very well positioned within the market to continue to grow and take market share.
Aaron Rakers: Yeah. Thank you, guys.
Aaron Rakers: Yeah. Thank you, guys.
Speaker #3: Yeah. Thank you,
Speaker #3: guys. Thank Thanks, Aaron. you.
Desmond Lynch: Thanks, Aaron.
Desmond Lynch: Thanks, Aaron.
Luc Seraphin: Thank you.
Luc Seraphin: Thank you.
Speaker #2: Thank you. The next question comes from Bastian Falcon with Susquehanna. You may proceed.
Operator: Thank you. The next question comes from Bastian Falken with Susquehanna. You may proceed.
Operator: Thank you. The next question comes from Bastian Falken with Susquehanna. You may proceed.
Bastian Falken: Hi, guys. Thanks for taking my question. I guess, one question that I have is, revisiting the average of the DIMMs per CPU expected in 2027, and you mentioned it previously, given the cost of memory and the shortage, has this changed your expectations of how many channels are being populated with DIMMs per CPU? And I have a follow-up.
Bastian Falken: Hi, guys. Thanks for taking my question. I guess, one question that I have is, revisiting the average of the DIMMs per CPU expected in 2027, and you mentioned it previously, given the cost of memory and the shortage, has this changed your expectations of how many channels are being populated with DIMMs per CPU? And I have a follow-up.
Speaker #5: Hi, guys. Thanks for taking my question. I guess one question that I have is revisiting the average of the DIMMs per CPU expected in 2027.
Speaker #5: And you mentioned it previously. Given the cost of memory and the shortage, has this changed your expectations of having channels or being populated with DIMMs per CPU?
Speaker #5: And I have a
Speaker #5: follow-up. Thanks, Bastian, for your
Luc Seraphin: Thanks, Bastian, for your question. You know, the DIMMs per CPU dynamic is a complex one. Typically, what happens is, you know, people who want, you know, very high bandwidth, like in AI types of application, tend to use fewer DIMMs per channel, so that they can make the best use of these bandwidth. And people who are in need of more capacity tends to populate more DIMMs, you know, on their channels. And then you combine this with you know, the respective growth of standard applications with AI applications. So we continue to see, you know, on average, you know, the number of DIMMs per channel growing, but it's a bit difficult to really put a number on.
Luc Seraphin: Thanks, Bastian, for your question. You know, the DIMMs per CPU dynamic is a complex one. Typically, what happens is, you know, people who want, you know, very high bandwidth, like in AI types of application, tend to use fewer DIMMs per channel, so that they can make the best use of these bandwidth. And people who are in need of more capacity tends to populate more DIMMs, you know, on their channels. And then you combine this with you know, the respective growth of standard applications with AI applications. So we continue to see, you know, on average, you know, the number of DIMMs per channel growing, but it's a bit difficult to really put a number on.
Speaker #4: The DIMMs per CPU dynamic is a complex one. Typically, what happens is people who want very high bandwidth, like in AI types of applications, tend to use fewer DIMMs per channel.
Speaker #4: Of these bandwidths. And people who are in need of more capacity tend to populate more DIMMs on their channels. And then you combine this with the respective growth of standard applications with AI applications, so we continue to see, on average, the number of DIMMs per channel growing, but it's a bit difficult to—it's a bit difficult to really put a number on.
Luc Seraphin: I think the memory situation is a broader situation than the number of DIMMs per channel. You know, I think, thank God memory is booming these days. There's a dynamic between HBM and standard DDR, for example. And, you know, with the standard DDR, there's a dynamic between the different speeds of these DDR. So I think, you know, overall, we believe that the market is gonna be constrained. But again, trying to put a number on how, you know, the supply constraints on the memory side is going to impact the number of DIMMs per channel, is something that is quite difficult to figure out.
Speaker #4: I think the memory situation is a broader situation than the number of DIMMs per channel. I think, thank God, memory is booming these days.
I think the memory situation is a broader situation than the number of DIMMs per channel. You know, I think, thank God memory is booming these days. There's a dynamic between HBM and standard DDR, for example. And, you know, with the standard DDR, there's a dynamic between the different speeds of these DDR. So I think, you know, overall, we believe that the market is gonna be constrained. But again, trying to put a number on how, you know, the supply constraints on the memory side is going to impact the number of DIMMs per channel, is something that is quite difficult to figure out.
Speaker #4: There's dynamic between HBM and standard DDR, for example. And with standard DDR, there's dynamic between the different speeds of these DDR. So I think, overall, we believe that the market is going to be constrained.
Speaker #4: But again, trying to put a number on how the supply constraints on the memory side are going to impact the number of DIMMs per channel is something that is quite difficult to figure out.
Speaker #5: Right. That is very helpful. And I have a follow-up. In terms of RCD contribution, what are your expectations of the DDR5 Gen 3 RCD contribution relative to Gen 1 and 2 in 2026, given the supply chain issues that you've encountered with your RCDs?
[Analyst]: Right. That's, that is very helpful. And I have a follow-up. In terms of RCD contribution, you know, what are your expectations of the DDR5 Gen3 RCD contribution relative to the Gen1 and 2 in 2026, given the supply chain issue that you've encountered with your RCDs that will be impacting Q1?
Bastian Falken: Right. That's, that is very helpful. And I have a follow-up. In terms of RCD contribution, you know, what are your expectations of the DDR5 Gen3 RCD contribution relative to the Gen1 and 2 in 2026, given the supply chain issue that you've encountered with your RCDs that will be impacting Q1?
Speaker #5: That will be impacting
Speaker #5: Q1. Yeah.
Luc Seraphin: Yeah, that, that's a good question. Thank you. That, you know, what we saw is, in Q4, Gen2 was predominant. You know, this is what we were expecting, and Gen3 was starting to ramp. It was growing in Q4 compared to Q3. You know, when we look at 2026, our view is that Gen3 will continue to grow and will probably be the predominant version of DDR5, you know, throughout the year. You know, Gen4 will contribute somehow, but because this is on a different type of core, it will have more limited adoption. The big next step is gonna be Gen5, and Gen5, you know, as we said earlier, is gonna depend on the introduction of the next generation platforms from Intel and AMD.
Luc Seraphin: Yeah, that, that's a good question. Thank you. That, you know, what we saw is, in Q4, Gen2 was predominant. You know, this is what we were expecting, and Gen3 was starting to ramp. It was growing in Q4 compared to Q3. You know, when we look at 2026, our view is that Gen3 will continue to grow and will probably be the predominant version of DDR5, you know, throughout the year. You know, Gen4 will contribute somehow, but because this is on a different type of core, it will have more limited adoption.
Speaker #4: That's a good question. Thank you. So what we saw is in Q4, Gen2 was predominant. This is what we were expecting, and Gen3 was starting to ramp.
Speaker #4: It was growing in Q4 compared to Q3. When we look at 2026, our view is that Gen3 will continue to grow, and it will probably be the predominant version of DDR5 throughout the year.
Speaker #4: Gen4 will contribute somehow, but because this is on a different type of core, it will have more limited adoption. The big next step is going to be Gen5.
The big next step is gonna be Gen5, and Gen5, you know, as we said earlier, is gonna depend on the introduction of the next generation platforms from Intel and AMD. So in summary, we continue to see Gen2, Gen3, and the mix between Gen2 and Gen3 is changing. You know, Gen3 is growing, and our expectation at this point in time is that Gen3 is gonna be dominant in 2026.
Speaker #4: And Gen5, as we said earlier, is going to depend on the introduction of the next-generation platforms from Intel and AMD. So, in summary, we'll continue to see Gen2, Gen3, and a mix between Gen2 and Gen3 is changing.
Luc Seraphin: So in summary, we continue to see Gen2, Gen3, and the mix between Gen2 and Gen3 is changing. You know, Gen3 is growing, and our expectation at this point in time is that Gen3 is gonna be dominant in 2026.
Speaker #4: Gen3 is growing, and our expectation at this point in time is that Gen3 is going to be dominant in 2026.
Speaker #3: Thank you very much.
[Analyst]: Thank you very much.
Bastian Falken: Thank you very much.
Speaker #4: Thank you.
Luc Seraphin: Thank you.
Luc Seraphin: Thank you.
Speaker #2: Thank you. The next question comes from Gary Mobley with Luke Capital. You may.
Operator: Thank you. The next question comes from Gary Mobley with Loop Capital. You may proceed.
Operator: Thank you. The next question comes from Gary Mobley with Loop Capital. You may proceed.
Speaker #2: proceed. Hey,
Gary Mobley: Hey, guys. Thanks for taking my question. I had a multipart follow-up question about the supply chain issue. First, do you see any reputational harm from this with your customer base? Did it impact the PMIC business more than the RCD business? And I guess logically, you know, we should assume a sharp revenue recovery in Q2. It sounds like Q1 revenue would have been about $99 to 100 million, you know, which is described as seasonally weak. And therefore, if you're going to, you know, recover that revenue and gain share in the year, presumably Q2 revenue would have been up sequentially from that. So can your supply chain recover to that degree, that quickly, to get back to the $100 million plus per quarter in product revenue?
Gary Mobley: Hey, guys. Thanks for taking my question. I had a multipart follow-up question about the supply chain issue. First, do you see any reputational harm from this with your customer base? Did it impact the PMIC business more than the RCD business? And I guess logically, you know, we should assume a sharp revenue recovery in Q2. It sounds like Q1 revenue would have been about $99 to 100 million, you know, which is described as seasonally weak. And therefore, if you're going to, you know, recover that revenue and gain share in the year, presumably Q2 revenue would have been up sequentially from that. So can your supply chain recover to that degree, that quickly, to get back to the $100 million plus per quarter in product revenue?
Speaker #6: Guys, thanks for taking my question. I had a multi-part follow-up question about the supply chain issue. First, do you see any reputational harm from this with your customer base?
Speaker #6: Did it impact the Companionship business more than the RCD business? And I guess logically, we should assume a sharp revenue recovery in Q2. It sounds like Q1 revenue would have been about $99 to $100 million, which is described as seasonally weak.
Speaker #6: And therefore, if you're going to recover that revenue and gain share in the year, presumably Q2 revenue would have been up sequentially from that.
Speaker #6: So, can your supply chain recover to that degree that quickly to get back to the $100 million-plus per quarter in product?
Speaker #6: revenue? So thank
Luc Seraphin: So, thank you, Gary, for your questions. I'll start, you know, with your initial questions and then Des comment on the numbers. Your first question is about the reputational risk. No, there's no reputational risk. Actually, when we identified that issue, we had all hands on deck, and we worked in close collaboration with, you know, our suppliers and our customers. And I think it's really, really important. We said, you know, over and over again over the last few years, that you know, quality management is really, really important. We had a real-life example here, where we identified an issue quickly. We had a very thorough quality process in place, you know, with our suppliers, with our customers, and we're back on track.
Luc Seraphin: So, thank you, Gary, for your questions. I'll start, you know, with your initial questions and then Des comment on the numbers. Your first question is about the reputational risk. No, there's no reputational risk. Actually, when we identified that issue, we had all hands on deck, and we worked in close collaboration with, you know, our suppliers and our customers. And I think it's really, really important. We said, you know, over and over again over the last few years, that you know, quality management is really, really important. We had a real-life example here, where we identified an issue quickly. We had a very thorough quality process in place, you know, with our suppliers, with our customers, and we're back on track.
Speaker #4: Thank you, Gary, for your questions and thoughts—with your initial questions and that comment on the numbers. Your first question is about the reputational risk.
Speaker #4: No, there's no reputational risk. Actually, when we identified that issue, we had all hands on deck, and we worked in close collaboration with our suppliers and our customers.
Speaker #4: And I think it's really, really important—we’ve said over and over again, over the last few years, that quality management is really, really important.
Speaker #4: We had a real-life example here where we identified an issue quickly. We had a very thorough quality process in place with our suppliers, with our customers.
Speaker #4: And we're back on track. The only issue that is left for Q1 is the fact that we need to replenish our supply chain. And it makes the best use of our testing capacity as we are also retesting old paths.
Luc Seraphin: You know, the only issue that is left for Q1 is the fact that we need to replenish, you know, our supply chain and make the best use of our, you know, testing capacity as we are also retesting old batches. But the reputation has not been damaged, you know, we've been able to identify the problem, fix the problem, and put, you know, actions in place quite quickly. The second question was about, you know, whether it affected the RCD or the other chips. It only affected the RCD, and actually, you know, older versions of the RCD, but the companion chips were not affected at all, on that. You know, on the numbers, maybe, Des, you want to comment?
You know, the only issue that is left for Q1 is the fact that we need to replenish, you know, our supply chain and make the best use of our, you know, testing capacity as we are also retesting old batches. But the reputation has not been damaged, you know, we've been able to identify the problem, fix the problem, and put, you know, actions in place quite quickly. The second question was about, you know, whether it affected the RCD or the other chips. It only affected the RCD, and actually, you know, older versions of the RCD, but the companion chips were not affected at all, on that. You know, on the numbers, maybe, Des, you want to comment?
Speaker #4: But the reputation has not been damaged. We've been able to identify the problem, fix the problem, and put actions in place quite quickly. Your second question was about whether it affected the RCD or the other chips.
Speaker #4: It only affected the RCD, and actually, older versions of the RCD. But the companion chips were not affected at all on that. On the numbers, maybe Des, you want to comment?
Speaker #3: I got it. It's Des. In terms of the inventory, I do expect that the inventory will be replenished by the end of, sort of, Q1.
Desmond Lynch: Hi, Gary, it's Des. In terms of the inventory, I do expect that the inventory will be replenished by the end of sort of Q1, and we'll be able to grow the inventory to a level which will be able to support our Q2 2026 demand and going forward from there. So again, as Luc talked about, you know, the issue has been contained. We're continue to replenish our inventory as we go throughout Q1, and that will put us in a good position, ending Q1 for meeting customers' demand for Q2 going forward.
Desmond Lynch: Hi, Gary, it's Des. In terms of the inventory, I do expect that the inventory will be replenished by the end of sort of Q1, and we'll be able to grow the inventory to a level which will be able to support our Q2 2026 demand and going forward from there. So again, as Luc talked about, you know, the issue has been contained. We're continue to replenish our inventory as we go throughout Q1, and that will put us in a good position, ending Q1 for meeting customers' demand for Q2 going forward.
Speaker #3: And we'll be able to grow the inventory to a level which we'll be able to support our Q2 '26 demand and going forward from there.
Speaker #3: So again, as Luke talked about, the issue has been contained. We'll continue to replenish our inventory as we go throughout Q1, and that'll put us in a good position ending Q1 for meeting customers' demand for Q2 going forward.
Speaker #6: Got it. For a follow-up, I want to ask about MRDIMM. Based on what you're seeing in the timing of the shipments, and then the rapid shipments and sort of queuing the memory ecosystem around those two server processor launches, do you still see revenue contribution?
Gary Mobley: Got it. So a follow-up, I want to ask about MRDIMM. Based on what you're seeing in timing of Venice shipments and Diamond Rapids shipments and sort of cueing the memory ecosystem around those two server processor launches, do you still see revenue contribution, I guess, material revenue contribution, from MRDIMM by the end of the calendar year?
Gary Mobley: Got it. So a follow-up, I want to ask about MRDIMM. Based on what you're seeing in timing of Venice shipments and Diamond Rapids shipments and sort of cueing the memory ecosystem around those two server processor launches, do you still see revenue contribution, I guess, material revenue contribution, from MRDIMM by the end of the calendar year?
Speaker #6: I guess material revenue contribution from MRDIM by the end of the calendar year?
Luc Seraphin: ... You know, as we said earlier, we are monitoring the, you know, the rollout of these platforms, and we are continuing, you know, activities around MRDIMM. But as we said on the earlier call, we see the initial contribution towards the end of the year. That's, you know, the very initial contribution of these platforms is gonna be, you know, towards the very end of the year, and the main contribution is happening in 2027.
Luc Seraphin: ... You know, as we said earlier, we are monitoring the, you know, the rollout of these platforms, and we are continuing, you know, activities around MRDIMM. But as we said on the earlier call, we see the initial contribution towards the end of the year. That's, you know, the very initial contribution of these platforms is gonna be, you know, towards the very end of the year, and the main contribution is happening in 2027.
Speaker #4: As we said earlier, we are monitoring the rollout of these platforms, and we are continuing activities around MRDIM. As we said on the earlier call, we see the initial contribution towards the end of the year.
Speaker #4: That's—the very initial contribution of these platforms is going to be towards the very end of the year. And the main contribution is happening in—
Speaker #4: 2027. All
Speaker #6: right. Thank you.
Sebastien Naji: All right, thank you.
Gary Mobley: All right, thank you.
Speaker #4: Thanks,
Luc Seraphin: Thanks, Gary.
Luc Seraphin: Thanks, Gary.
Speaker #4: Gary. Thank you.
Operator: Thank you. The following comes from Tristan Gerra with Baird. You may proceed.
Operator: Thank you. The following comes from Tristan Gerra with Baird. You may proceed.
Speaker #2: The following comes from Tristan and Gary with Baird. You may proceed.
Speaker #3: Hi, good afternoon. It looks like you started to be a little bit more bullish on your market, RCD, with the share prospect in companionships ramping.
Tristan Gerra: Hi, good afternoon. It looks like you started to be a little bit more bullish on your market share prospect in RCD with CXL shipments ramping. Is that the reason why we're now seeing market share that it looks like is, you know, above what your expectation was a year ago, and, you know, mid-forties, and what would be kind of the upside that you think you could get to by end of this year or even next year?
Tristan Gerra: Hi, good afternoon. It looks like you started to be a little bit more bullish on your market share prospect in RCD with CXL shipments ramping. Is that the reason why we're now seeing market share that it looks like is, you know, above what your expectation was a year ago, and, you know, mid-forties, and what would be kind of the upside that you think you could get to by end of this year or even next year?
Speaker #3: Is that the reason why we're now seeing market share that looks like it's above what your expectation was a year ago? And mid-40s, and what would be kind of the upside that you think you could get to by the end of this year or even next year?
Speaker #4: Thanks, Tristan. I'll make the first comment about the market share. When we talk about being in the mid-40s, it's for DDR5 RCDs. So these market share gains, year over year, are really—I’m really referring to the RCD chip.
Luc Seraphin: Thanks, Tristan. The I'll make the first comment about the market share. When we talk about, you know, being in the mid-forties, it's for DDR5 RCDs. You know, so these market share gains, you know, year-over-year, are really referring to the RCD chip. And this is the result of you know, the increased design win footprint we were able to secure, you know, from generation to generation. You know, from D4 to D5, we had many more, much higher footprint, and at every generation of D5, we increased our footprint in terms of design wins. That translates into, you know, our market share for the RCD chip. So when we mentioned that in 2025, you know, our market share was in the mid-forties, that's on the DDR5 RCDs.
Luc Seraphin: Thanks, Tristan. The I'll make the first comment about the market share. When we talk about, you know, being in the mid-forties, it's for DDR5 RCDs. You know, so these market share gains, you know, year-over-year, are really referring to the RCD chip. And this is the result of you know, the increased design win footprint we were able to secure, you know, from generation to generation. You know, from D4 to D5, we had many more, much higher footprint, and at every generation of D5, we increased our footprint in terms of design wins. That translates into, you know, our market share for the RCD chip. So when we mentioned that in 2025, you know, our market share was in the mid-forties, that's on the DDR5 RCDs.
Speaker #4: And this is the result of the increased design win footprint we were able to secure from generation to generation. From D4 to D5, we had many more, much higher footprint.
Speaker #4: And at every generation of D5, we increased our footprint in terms of design wins. That translates into our market share for the RCD chip.
Speaker #4: So when we mentioned that in 2025, our market share was in the mid-40s, that's on the DDR5 RCDs. And the DDR5 overall generation is still early in its cycle.
Luc Seraphin: You know, the DDR5 overall generation is still early in its cycle, so there's still room to gain share, you know, in the mid-40 now. We always said we could be between 40 and 50, so we're still chasing, you know, more share, you know, on the DDR5 RCD chip. You know, the companion chips are an addition to this, you know, and they're ramping steadily, slowly, you know, as Dev explained, you know, into the market as, you know, the qualifications take place. But this is gonna be additional revenue to the RCD revenue.
You know, the DDR5 overall generation is still early in its cycle, so there's still room to gain share, you know, in the mid-40 now. We always said we could be between 40 and 50, so we're still chasing, you know, more share, you know, on the DDR5 RCD chip. You know, the companion chips are an addition to this, you know, and they're ramping steadily, slowly, you know, as Dev explained, you know, into the market as, you know, the qualifications take place. But this is gonna be additional revenue to the RCD revenue.
Speaker #4: So there's still room to gain share in the mid-40s now. We always said we could be between 40 and 50. So we're still chasing more share.
Speaker #4: On the DDR5 RCD chip, the companionships are an addition to this. And they're ramping steadily, slowly. As Des explained, into the market as the qualifications take place.
Speaker #4: But this is going to be additional revenue to the RCD revenue.
Speaker #3: Yeah, and I was just wondering—the fact that you have Companionship, does that help your RCD share? Or is that completely separate? I sense that perhaps you saw some cross-setting opportunities or benefits that will go beyond just the additional TAM of the Companionship.
Tristan Gerra: Yeah. And I was just wondering if the fact that you have partnership, does that help your RCD share, or is that completely separate? I sense that perhaps you saw some cross-selling opportunities or benefits, you know, that will go beyond just the additional term of the partnership. And then also my follow-up question is, if there's any update on the potential LPCAMM2 opportunity, whether it's in the current Blackwell platform or the upcoming platform for you to potentially participate?
Tristan Gerra: Yeah. And I was just wondering if the fact that you have partnership, does that help your RCD share, or is that completely separate? I sense that perhaps you saw some cross-selling opportunities or benefits, you know, that will go beyond just the additional term of the partnership. And then also my follow-up question is, if there's any update on the potential LPCAMM2 opportunity, whether it's in the current Blackwell platform or the upcoming platform for you to potentially participate?
Speaker #3: And then also, my follow-up question is, if there's any update on the potential, so, can too, opportunity—whether it's in the current Blackwell platform or the upcoming platform—for you to potentially participate?
Speaker #4: Yes, I'll answer first on the companionship—the TAM. Yeah, one way to look at it, as you rightly say, is to add the TAMs, but is there a connection between the two?
Luc Seraphin: Yes, I'll answer first on the, you know, on the companion chip, the timing. Yeah, one way to look at it, as you rightly say, is to add the times. But is there a connection between the two? There's an indirect impact. You know, as the speeds on the DIMMs continue to increase, it is more and more important for our customers to get their chips from the same supplier for interoperability reasons. You know, these systems are very, very complex. And, you know, if we have all chips in-house, we can do a lot of system testing before shipping those parts to our customers, so that puts us in a favorable, you know, position.
Luc Seraphin: Yes, I'll answer first on the, you know, on the companion chip, the timing. Yeah, one way to look at it, as you rightly say, is to add the times. But is there a connection between the two? There's an indirect impact. You know, as the speeds on the DIMMs continue to increase, it is more and more important for our customers to get their chips from the same supplier for interoperability reasons. You know, these systems are very, very complex. And, you know, if we have all chips in-house, we can do a lot of system testing before shipping those parts to our customers, so that puts us in a favorable, you know, position.
Speaker #4: There's an indirect impact. As the speeds on the DIMs continue to increase, it is more and more important for our customers to get their chips from the same supplier for interoperability reasons.
Speaker #4: These systems are very, very complex. And if we have old chips in-house, we can do a lot of system testing before shipping those parts to our customers.
Speaker #4: So that puts us in a favorable position. So there's a positive indirect impact on our ability to grow our PMIC, in particular, but also the other companionships.
Luc Seraphin: So there's a positive, indirect impact, you know, on our ability to grow our PMIC in particular, but also the other companion chips, as the speeds on the RCD continue to increase. So that's the answer on that. On the LPCAMM2, you know, we continue to monitor the dynamic there, you know, on the LPCAMM2. There's definitely, you know, an SPD opportunity on the LPCAMM2 for us. You know, we're talking about next generations and how, you know, these next generations can evolve, in particular, in the field of power management. That could open, you know, other opportunities in the future.
So there's a positive, indirect impact, you know, on our ability to grow our PMIC in particular, but also the other companion chips, as the speeds on the RCD continue to increase. So that's the answer on that. On the LPCAMM2, you know, we continue to monitor the dynamic there, you know, on the LPCAMM2. There's definitely, you know, an SPD opportunity on the LPCAMM2 for us. You know, we're talking about next generations and how, you know, these next generations can evolve, in particular, in the field of power management. That could open, you know, other opportunities in the future.
Speaker #4: As the speeds on the RCD continue to increase, so that's the answer on that. On the SoCam, we continue to monitor the dynamics there.
Speaker #4: On the SoCam, there's definitely an SPD opportunity on the SoCam for us. We're talking about next generations and how these next generations can evolve, in particular in the field of power management, that could open other opportunities in the future.
Speaker #4: But I would say this, as we said in the prepared remarks, our strategy is to have solutions for every JEDEC standard module, whether it's on the client side or whether it's on the data center side.
Luc Seraphin: But I would say this, as we said in the prepared remarks, you know, our strategy is to have solutions for every JEDEC standard module, whether, you know, it's on the client side, or whether it's on the, you know, on the data center side. So we will continue to monitor what's happening, you know, with CAMM2. On LPCAMM2, we have an opportunity for the SPD Hub. As the evolution of CAMM2 continues and new chips are being defined, we're gonna be part of that definition, and we'll continue to develop chips, to support that market.
But I would say this, as we said in the prepared remarks, you know, our strategy is to have solutions for every JEDEC standard module, whether, you know, it's on the client side, or whether it's on the, you know, on the data center side. So we will continue to monitor what's happening, you know, with CAMM2. On LPCAMM2, we have an opportunity for the SPD Hub. As the evolution of CAMM2 continues and new chips are being defined, we're gonna be part of that definition, and we'll continue to develop chips, to support that market.
Speaker #4: So, we will continue to monitor what's happening with SoCam. On the SoCam 2, we have an opportunity for the SPD hub. As the evolution of SoCam continues and new chips are being defined, we're going to be part of that definition.
Speaker #4: And we'll continue to develop chips to support that market.
Speaker #3: Great. Thank you very much.
Tristan Gerra: Great. Thank you very much.
Tristan Gerra: Great. Thank you very much.
Speaker #4: Thank you,
Luc Seraphin: Thank you, Tristan.
Luc Seraphin: Thank you, Tristan.
Speaker #4: Tristan. Thank you.
Operator: Thank you. The next question comes from Sebastien Naji with William Blair. You may proceed.
Operator: Thank you. The next question comes from Sebastien Naji with William Blair. You may proceed.
Speaker #2: The next question comes from Sebastian Naji with William Blair. You may
Speaker #2: proceed. Yeah.
Sebastien Naji: Yeah, thank you for taking the question. Could you maybe remind us how much of your product business today is not related to the server market? You mentioned some early success in the client market. And as we think about 2026, does rising memory cost maybe create some friction in this part of the market for Rambus?
Sébastien Naji: Yeah, thank you for taking the question. Could you maybe remind us how much of your product business today is not related to the server market? You mentioned some early success in the client market. And as we think about 2026, does rising memory cost maybe create some friction in this part of the market for Rambus?
Speaker #5: Thank you for taking the question. Could you maybe remind us how much of your product business today is not related to the server market?
Speaker #5: You mentioned some early success in the client market. And as we think about 2026, does rising memory cost maybe create some friction in this part of the market for Rambus?
Luc Seraphin: The client market remains minimal for us at this point in time, you know, for a couple of reasons. One is the adoption of, you know, the CKD chip, you know, or the equivalent of the clock chip into the client space, really is limited to the very, very high end, you know, parts of that client space. So you know, the contribution is minimal in terms of numbers. You know, our goal is still, you know, to get 20% share, you know, in the long run for that. But these platforms have to, you know, ramp in the market. Their contribution are still going to be minimal in, you know, even in 2026 for client.
Speaker #4: The client market remains minimal for us at this point in time, for a couple of reasons. One is, the adoption of the CKD chip, or the equivalent of a clock chip, into the client space really is limited to the very, very high-end parts of that client space.
Luc Seraphin: The client market remains minimal for us at this point in time, you know, for a couple of reasons. One is the adoption of, you know, the CKD chip, you know, or the equivalent of the clock chip into the client space, really is limited to the very, very high end, you know, parts of that client space. So you know, the contribution is minimal in terms of numbers. You know, our goal is still, you know, to get 20% share, you know, in the long run for that. But these platforms have to, you know, ramp in the market. Their contribution are still going to be minimal in, you know, even in 2026 for client.
Speaker #4: So, the contribution is minimal in terms of numbers. Our goal is still to get a 20% share in the long run for that. But these platforms have to ramp in the market.
Speaker #4: Their contribution is still going to be minimal, even in 2026, for clients. So the vast majority of the business is in the data center space.
Luc Seraphin: So the vast majority of the business is in the data center space. But this being said, you know, in the long run, the power management and the clock management are going to be very, very important in the client space as well. It's important for us to position ourselves there and to have solutions for all, you know, platforms. So that's why we're doing this, in terms of the client space. And your second question was?
So the vast majority of the business is in the data center space. But this being said, you know, in the long run, the power management and the clock management are going to be very, very important in the client space as well. It's important for us to position ourselves there and to have solutions for all, you know, platforms. So that's why we're doing this, in terms of the client space. And your second question was?
Speaker #4: But this being said, in the long run, the power management and the clock management are going to be very, very important in the client space as well.
Speaker #4: It's important for us to position ourselves there, and to have solutions for all platforms. So that's why we are doing this, in terms of the client space.
Speaker #4: And your second question
Speaker #4: was. Oh, no,
Aaron Rakers: Oh, no, no, that was my first question. My second question-
Sébastien Naji: Oh, no, no, that was my first question. My second question-
Speaker #3: That was my first question. My second question.
Luc Seraphin: Oh, that was your question. Okay, thank you. Yeah.
Luc Seraphin: Oh, that was your question. Okay, thank you. Yeah.
Speaker #4: That was no.
Speaker #4: Okay. Thank you. Yeah.
Aaron Rakers: IP side of the business, if I may.
Sébastien Naji: IP side of the business, if I may.
Speaker #3: IP side of your question.
Speaker #3: the business. If I can. So, RAMBUS has
Luc Seraphin: Okay.
Luc Seraphin: Okay.
Speaker #4: Okay.
Aaron Rakers: So, you know-
Aaron Rakers: So, you know-
Luc Seraphin: Uh-huh.
Luc Seraphin: Uh-huh.
Aaron Rakers: Rambus has benefited a lot from the explosion in the number of ASICs that are being designed. You have many companies attempting to design their own XPUs. We've also seen an accelerated cadence of new chip releases. As we go into 2026, are you seeing any signs of a slowdown in, in some of these new chip design starts or, that could start to impact your IP business?
Sébastien Naji: Rambus has benefited a lot from the explosion in the number of ASICs that are being designed. You have many companies attempting to design their own XPUs. We've also seen an accelerated cadence of new chip releases. As we go into 2026, are you seeing any signs of a slowdown in, in some of these new chip design starts or, that could start to impact your IP business?
Speaker #3: We have benefited a lot from the explosion in the number of ASICs that are being designed. Do you have many companies attempting to design their own XPUs?
Speaker #3: You've also seen an accelerated cadence of new chip releases. As we go into 2026, are you seeing any signs of a slowdown in some of these new chip design starts, or anything that could start to impact your IP business?
Speaker #4: Well, oh, you want to go, Des? Go ahead. Yeah.
Luc Seraphin: Well, I'll, I'll start. You know- Oh, you wanna go, Darius? Go ahead. Yeah.
Luc Seraphin: Well, I'll, I'll start. You know- Oh, you wanna go, Darius? Go ahead. Yeah.
Desmond Lynch: I'll start, Luc, and maybe you can add on. Yeah, we were very pleased with how our silicon IP business performed in 2025. It performed in line with the expectations, and the portfolio is really well positioned to address the demand for AI solutions from there. If you look at our portfolio, with a leading-edge portfolio, with critical IP solutions and the high-speed memory, interconnect, and security IP, which is tailored towards the AI sort of workloads from there. Our expectation is that, that would continue to grow in 2026, in line with our long-term growth expectations from there. So very bullish on our overall sort of portfolio and outlook for the IP business.
Desmond Lynch: I'll start, Luc, and maybe you can add on. Yeah, we were very pleased with how our silicon IP business performed in 2025. It performed in line with the expectations, and the portfolio is really well positioned to address the demand for AI solutions from there. If you look at our portfolio, with a leading-edge portfolio, with critical IP solutions and the high-speed memory, interconnect, and security IP, which is tailored towards the AI sort of workloads from there. Our expectation is that, that would continue to grow in 2026, in line with our long-term growth expectations from there. So very bullish on our overall sort of portfolio and outlook for the IP business.
Speaker #5: You can add on. We were very pleased with how the Silicon IP business performed in 2025. It performed in line with expectations, and the portfolio is really well positioned to address the demand for AI solutions from there.
Speaker #5: If you look at our portfolio, we have a leading-edge portfolio with critical IP solutions in high-speed memory interconnect and security IP, which is tailored towards AI workloads from there.
Speaker #5: And our expectation is that that would continue to grow in 2026 in line with our long-term growth expectations from there. So, very bullish on our overall sort of portfolio and outlook for the IP.
Speaker #5: business. Great.
Aaron Rakers: Great. Thank you.
Sébastien Naji: Great. Thank you.
Speaker #3: Thank you.
Speaker #4: Thanks. Yeah.
Desmond Lynch: Thanks.
Desmond Lynch: Thanks.
Operator: Yeah. The following is a follow-up from Kevin Cassidy with Rosenblatt. You may proceed.
Operator: Yeah. The following is a follow-up from Kevin Cassidy with Rosenblatt. You may proceed.
Speaker #2: The following is a follow-up from Kevin Cassidy with Rosenblatt. You may
Speaker #2: proceed. Yeah.
Kevin Cassidy: Yeah, thanks for taking my follow-up. And maybe along those lines of custom, Luc, I think you had mentioned custom hardware, and I wonder if you could give us a little more details on that. How many customers can you support? And what would be the timing of that?
Kevin Cassidy: Yeah, thanks for taking my follow-up. And maybe along those lines of custom, Luc, I think you had mentioned custom hardware, and I wonder if you could give us a little more details on that. How many customers can you support? And what would be the timing of that?
Speaker #4: Thanks for taking my follow-up. And maybe along those lines of custom look, I think you had mentioned custom hardware, and I wonder if you could give us a little more details on that—how many customers can you support and what would be the timing of that?
Luc Seraphin: Yes. When we say custom hardware, you know, there are a lot of people who are developing their own chips, you know, for their AI infrastructure or their server infrastructure. Typically, you know, accelerators, you know, chips that are dedicated to inference and these kind of things. So every time they do develop those type of chips, you know, they have a potential need for HBM, and at high speed, PCIe at high speed, or security solutions, so GDDR sometimes. So, as you know, we position our portfolio to be at the high end of those standards. So we typically talk to the people who work, you know, at the high end of those systems. We can support a large number of customers because we have a limited portfolio in terms of the scope.
Speaker #4: Yes. When we say custom hardware, there are a lot of people who are developing their own chips for their AI infrastructure or their server infrastructure.
Luc Seraphin: Yes. When we say custom hardware, you know, there are a lot of people who are developing their own chips, you know, for their AI infrastructure or their server infrastructure. Typically, you know, accelerators, you know, chips that are dedicated to inference and these kind of things. So every time they do develop those type of chips, you know, they have a potential need for HBM, and at high speed, PCIe at high speed, or security solutions, so GDDR sometimes. So, as you know, we position our portfolio to be at the high end of those standards. So we typically talk to the people who work, you know, at the high end of those systems. We can support a large number of customers because we have a limited portfolio in terms of the scope.
Speaker #4: Typically, accelerators—chips that are dedicated to inference and these kinds of things—every time they do develop those types of chips, they have a potential need for HBM at high speed, PCIe at high speed, or security solutions.
Speaker #4: So, GDDR sometimes. So, as you know, we position our portfolio to be at the high end of those standards. So, we typically talk to the people who work at the high end of those systems.
Speaker #4: We can support a large number of customers because we have a limited portfolio in terms of scope. We focus on PCIe, CXL, HBM, GDDR, and security IP.
Luc Seraphin: You know, we focus on PCIe, CXL, HBM, GDDR, you know, and security IP. So we have a laser-focused portfolio that addresses, you know, potentially a large number of customers who are working on the leading edge of those technologies. That's really what's driving, you know, the business for us, as opposed to, you know, potentially other IP suppliers who have a much broader portfolio. We narrow our portfolio for the needs of people who develop chips for the data center, and most of these chips are either their own processors; some people develop their own processors, as opposed to you know, buying merchant processors. Other types of applications are accelerators to improve the performance of their systems.
You know, we focus on PCIe, CXL, HBM, GDDR, you know, and security IP. So we have a laser-focused portfolio that addresses, you know, potentially a large number of customers who are working on the leading edge of those technologies. That's really what's driving, you know, the business for us, as opposed to, you know, potentially other IP suppliers who have a much broader portfolio. We narrow our portfolio for the needs of people who develop chips for the data center, and most of these chips are either their own processors; some people develop their own processors, as opposed to you know, buying merchant processors. Other types of applications are accelerators to improve the performance of their systems.
Speaker #4: So we have a laser-focused portfolio that addresses potentially a large number of customers who are working on the leading edge of those technologies. That's really what's driving the business for us, as opposed to potentially other IP suppliers who have a much broader portfolio. We narrow our portfolio for the needs of people who develop chips for the data center, and most of these chips are either their own processors—some people develop their own processors as opposed to buying merchant processors.
Speaker #4: Other types of applications are accelerators to improve the performance of their systems. Okay. Great. Thank you.
Kevin Cassidy: Okay, great. Thank you.
Kevin Cassidy: Okay, great. Thank you.
Speaker #2: Thank you. We have another follow-up from Aaron Rakers with Wells Fargo. You may proceed.
Operator: Thank you. We have another follow-up from Aaron Rakers with Wells Fargo. You may proceed.
Operator: Thank you. We have another follow-up from Aaron Rakers with Wells Fargo. You may proceed.
Speaker #6: Yeah, thanks for taking a follow-up question. I guess the first one is, Luke, you mentioned there is risk in terms of memory supply and availability.
Aaron Rakers: Yeah, thanks for taking a follow-up question. I guess the first one is, you know, Luc, you mentioned, like, you know, there is risk in terms of memory supply and availability. I'm curious, as you look back at this last quarter or coming out of, you know, the last quarter in these first couple weeks of this first quarter, have you seen any signs of memory constraints impacting your customers' ability to fulfill demand? Or any... How would you characterize inventory levels that you're seeing at some of your major customers? Any thoughts on that would be great.
Aaron Rakers: Yeah, thanks for taking a follow-up question. I guess the first one is, you know, Luc, you mentioned, like, you know, there is risk in terms of memory supply and availability. I'm curious, as you look back at this last quarter or coming out of, you know, the last quarter in these first couple weeks of this first quarter, have you seen any signs of memory constraints impacting your customers' ability to fulfill demand? Or any... How would you characterize inventory levels that you're seeing at some of your major customers? Any thoughts on that would be great.
Speaker #6: I'm curious, as you look back at this last quarter, or coming out of the last quarter and these first couple of weeks of this first quarter, have you seen any signs of memory constraints impacting your customers' ability to fulfill demand, or how would you characterize inventory levels that you're seeing at some of your major customers?
Speaker #6: Any thoughts on that would be
Speaker #6: great. Yeah.
Luc Seraphin: Yes, sure. You know, we are in a small, you know, ecosystem, as you know, and one of the common theme that we hear is that, you know, the demand, you know, for servers is solid. You know, there's a refresh cycle, there's a... you know, that is not over. There's also, you know, agentic AI and all the inference applications that drive demand. But what we hear from the same customers is that they're gonna be constrained by supply.
Luc Seraphin: Yes, sure. You know, we are in a small, you know, ecosystem, as you know, and one of the common theme that we hear is that, you know, the demand, you know, for servers is solid. You know, there's a refresh cycle, there's a... you know, that is not over. There's also, you know, agentic AI and all the inference applications that drive demand. But what we hear from the same customers is that they're gonna be constrained by supply.
Speaker #4: Sure. We are in a small ecosystem, as you know. And when we talk to our customers and partners, we hear those comments. And one of the common themes that we hear is that the demand for servers is solid.
Speaker #4: Cycle. There's a refresh that is not over. There's also agentic AI and all the inference applications that drive demand. But what we hear from the same customers is that they're going to be constrained by supply.
Luc Seraphin: You know, and we hear this directly from our customers, and this is why, you know, when we look at, you know, the market potential for us, you know, we tend to be prudent, because we're aware, you know, of these comments, you know, from our customers in terms of supply. So that's, you know, what the basis of what our comments are. We see, you know, on the supply side, we also see, Aaron, on the supply, excuse me. On the supply side, you know, we also see, you know, lengthening lead times. It's nothing to do with the memory guys, but there's also, you know, on the supply side, you know, lead times continue to increase.
You know, and we hear this directly from our customers, and this is why, you know, when we look at, you know, the market potential for us, you know, we tend to be prudent, because we're aware, you know, of these comments, you know, from our customers in terms of supply. So that's, you know, what the basis of what our comments are. We see, you know, on the supply side, we also see, Aaron, on the supply, excuse me. On the supply side, you know, we also see, you know, lengthening lead times. It's nothing to do with the memory guys, but there's also, you know, on the supply side, you know, lead times continue to increase. And that's why we believe in 2026, the demand is solid, but we're gonna be more constrained by supply than we're gonna be by demand.
Speaker #4: And we hear this directly from our customers. And this is why, when we look at the market potential for us, we tend to be prudent because we are aware.
Speaker #4: All these comments from our customers in terms of supply. So that's what the basis of what our comments are. We see on the supply side, we also see on the supply side—excuse me—on the supply side, we also see lengthening in lead times.
Speaker #4: It’s nothing to do with the memory, guys. But there’s also, on the supply side, lead times continue to increase. And that’s why we believe in 2026 the demand is solid, but we’re going to be more constrained by supply than we’re going to be by demand.
Luc Seraphin: And that's why we believe in 2026, the demand is solid, but we're gonna be more constrained by supply than we're gonna be by demand.
Speaker #3: Yeah, that's helpful. And then, Des, real quickly on the gross margin line—I want to make sure I'm clear. Given the supply chain issues, you don't expect any kind of gross margin, any kind of inventory provisions, or anything of that nature?
Aaron Rakers: Yeah, that's helpful. And then, Dez, real quickly on the gross margin line, you know, I wanna make sure I'm clear. Like, given the supply chain issues, you don't expect any kind of gross margin, any kind of inventory provisions or anything of that nature? And I guess what I'm trying to get at is, you know, the product gross margin looks like it's, you know, still hovering in that plus 60% range. Is that still the expectation that we stay in that low 60% range here as we look forward? Thank you.
Aaron Rakers: Yeah, that's helpful. And then, Dez, real quickly on the gross margin line, you know, I wanna make sure I'm clear. Like, given the supply chain issues, you don't expect any kind of gross margin, any kind of inventory provisions or anything of that nature? And I guess what I'm trying to get at is, you know, the product gross margin looks like it's, you know, still hovering in that plus 60% range. Is that still the expectation that we stay in that low 60% range here as we look forward? Thank you.
Speaker #3: And I guess what I’m trying to get at is the product gross margin looks like it’s still hovering in that plus 60% range. Is that still the expectation, that we stay in that low 60% range here as we look forward?
Speaker #3: Thank
Speaker #3: Thank you. Hi.
Desmond Lynch: Hi, yeah, that would be the right expectation, going forward. If you look at the full year of 2025, you know, our gross margins were around 61.5%, which was in line with 2024's performance and consistent with our long-term model of 60% to 65%. I think what you will see is that we have a strong track record of delivering gross margins in line with these targets, and that would be my expectation. If you really look where we've been operating in the last sort of three years, we've been in a tight range of 61% to 63%, and I think that would be a fair way to think about the business in 2026 from a gross margin perspective.
Desmond Lynch: Hi, yeah, that would be the right expectation, going forward. If you look at the full year of 2025, you know, our gross margins were around 61.5%, which was in line with 2024's performance and consistent with our long-term model of 60% to 65%. I think what you will see is that we have a strong track record of delivering gross margins in line with these targets, and that would be my expectation.
Speaker #4: Yeah, that would be the right expectation going forward. If you look at the full year of 2025, our gross margins were around 61.5%, which was in line with 2024's performance and consistent with our long-term model of 60% to 65%.
Speaker #4: I think what you will see is that we have a strong track record of delivering gross margins in line with these targets, and that would be my expectation.
Speaker #4: If you really look where we've been operating in the last sort of three years, we've been in a tight range of 61% to 63%.
If you really look where we've been operating in the last sort of three years, we've been in a tight range of 61% to 63%, and I think that would be a fair way to think about the business in 2026 from a gross margin perspective. We'll continue to be disciplined in approach to pricing, and as always, we'll continue to drive manufacturing cost savings going forward, which enables us to drive to the gross margins within the range I mentioned earlier.
Speaker #4: And I think that would be a fair way to think about the business in 2026 from a gross margin perspective. We'll continue to be disciplined in our approach to pricing, and, as always, we'll continue to drive manufacturing cost savings going forward, which enables us to drive to the gross margins within the range I mentioned earlier.
Desmond Lynch: We'll continue to be disciplined in approach to pricing, and as always, we'll continue to drive manufacturing cost savings going forward, which enables us to drive to the gross margins within the range I mentioned earlier.
Speaker #3: Perfect. Thanks,
Aaron Rakers: Perfect. Thanks, Dez.
Aaron Rakers: Perfect. Thanks, Dez.
Speaker #4: Thanks,
Desmond Lynch: Thanks, Aaron.
Desmond Lynch: Thanks, Aaron.
Speaker #4: Aaron. Thank you.
Operator: Thank you. At this time, there are no further questions. This concludes the question and answer session. I would now like to turn the conference back over to the company.
Operator: Thank you. At this time, there are no further questions. This concludes the question and answer session. I would now like to turn the conference back over to the company.
Speaker #2: At this time, there are no further questions. This concludes the question-and-answer session. I would now turn the conference back over to the
Speaker #2: company.
Speaker #3: Thank you, everyone, who has joined us.
Luc Seraphin: Thank you, everyone, who has joined us today, for your interest and time, and we look forward to speaking with you again soon. Have a great day. Thank you.
Luc Seraphin: Thank you, everyone, who has joined us today, for your interest and time, and we look forward to speaking with you again soon. Have a great day. Thank you.
Speaker #3: Thank you for your interest and time, and we look forward to speaking with you again soon. Have a great day. Thank you.
Operator: Thank you. This now concludes today's conference.
Operator: Thank you. This now concludes today's conference.
