Rambus Stock Plunges In After-Hours Following Q3 Earnings, Here’s Why

• CEO Luc Seraphin said, “Rambus delivered a very strong third quarter, with record product revenue and excellent cash from operations.”
• Provision for income taxes was significantly higher than a year ago due to recent changes in tax legislation.
• Rambus settled Monday’s regular session up 7.77% at its highest level since its dot.com peak in 2000.

Rambus, Inc. (RMBS) shares fell sharply in Monday’s extended session despite the chip interface technologies company announcing a third-quarter revenue beat, underpinned by record product revenue. The company forecast sequentially lower licensing billings, but retail traders aren’t ready to throw in the towel yet.

The stock, which has traded in a 52-week range of $40.12 to $114.55, shed nearly 20% in the extended session. It, however, settled Monday’s regular session up 7.77% at its highest level since its dot.com peak in 2000. If the after-hours stock drop is carried over into Tuesday’s regular session, the stock is on track for its worst day in a decade.

Rambus’ Q3 Earnings Snapshot

San Jose, California-based Rambus reported earnings per share (EPS) of $0.44 for the third quarter of the fiscal year 2025, down slightly from $0.45 a year ago. Revenue climbed 22.7% Year-over-Year (YoY) to $178.5 million, exceeding the Fiscal.ai-compiled consensus of $175.67 million. Product revenue (about 53% of the total) jumped 41%. The company noted that the provision for income taxes was significantly higher than a year ago, driven by recent changes in tax legislation.

CEO Luc Seraphin said, “Rambus delivered a very strong third quarter, with record product revenue and excellent cash from operations, while continuing to execute on our strategic roadmap.”

Rambus’ Forward Outlook

Seraphin said he expects Rambus’ sustained DDR5 product leadership and ramping contributions from new products will likely help the full-year product revenue growth to outpace the market.

For the fourth quarter, the company guided to licensing billings of $60 million to $66 million compared to the third quarter’s $66.1 million. It also expects product revenue of $94 million to $100 million and contract and other revenue of $25 million to $31 million.

What Retail Is Saying About Rambus’ Results

Following the quarterly results, Rambus stock elicited an ‘extremely bullish’ reaction from retailers on Stocktwits, the same level as a day before, while the message volume increased to ‘extremely high’ levels by late Monday. 

A bullish watcher asked fellow retail traders not to react emotionally to the print.

Another watcher also called the post-market plunge an “overreaction” and noted that the volume was not robust. Although not ruling out a move to $80, they said, “If you read the report, they are fine... just too much high expectation it seems, all upside priced in. Don't trade it, own it - they have 670mm cash on hand - primed for M&A.”

Rambus stock has gained over 123% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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