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Restatement of Consolidated Financial Statements | 6 Months Ended
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Jun. 30, 2021
Accounting Changes and Error Corrections [Abstract] |
Restatement of Consolidated Financial Statements | Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Error Rambus Inc. (the “Company” or “Rambus”) restated its previously issued consolidated financial statements and related disclosures as of and for the fiscal years ended December 31, 2020 and 2019 and presented the impact of the restatement on the relevant unaudited interim financial information for each of the quarterly periods during the years ended December 31, 2020 and 2019 on Form 10-K/A filed on March 29, 2021, in order to correct errors resulting from the incorrect application of generally accepted accounting principles relating to revenue recognition as it pertains to a single customer agreement (the “Impacted Agreement”). Additionally, to correct errors that the Company has determined to be immaterial, both individually and in aggregate, the Company also restated the consolidated financial statements for the fiscal years ended December 31, 2020 and 2019. Impact of Restatement The following errors in the Company’s consolidated financial statements were identified and corrected: a) Correction of revenue related to the Impacted Agreement: During the quarter ended March 31, 2021, the Company determined that a portion of revenue under a single customer agreement that had not yet been recognized, should have been recognized during the quarters ended September 30, 2019, December 31, 2019, March 31, 2020, and June 30, 2020. The Impacted Agreement contained a single performance obligation for a license to the Company’s patents and technology in exchange for consideration, a portion of which was fixed at the inception of the contract and a portion that was dependent on the customer’s applicable sales (as stipulated in the agreement) for the four consecutive quarters commencing on July 1, 2019 and ending on June 30, 2020. The Company accounted for the agreement as a right-to-use IP license agreement with the fixed portion of the consideration appropriately recognized at the inception of the agreement when control of the license was transferred to the customer. However, the Company did not recognize as revenue the portion of the consideration that depended on the customer’s sales beginning in the quarter ended September 30, 2019. During the quarter ended March 31, 2021, the Company reassessed its accounting for this uncertain portion of the consideration and determined that revenue associated with that uncertain portion of the consideration should have been recognized over the four quarters commencing on July 1, 2019 and ending June 30, 2020, which are the periods when the uncertainty surrounding the amount of the contingent consideration was resolved (that is when the customer’s sales occurred for which the contingent payments were based). This error resulted in royalty revenue being corrected by approximately $3.6 million in each of the years ended December 31, 2020 and 2019, resulting in an increase in royalty revenue for each of the respective periods. Unbilled receivables (both current and non-current, as applicable) on the consolidated balance sheets were also increased by the correction, given this additional revenue recognized is payable by the customer in ten equal quarterly installments with the first installment payable in the quarter ended March 31, 2021. Additionally, due to the significant financing component of the Impacted Agreement, immaterial amounts were corrected to increase interest and other income (expense), net, on the consolidated statements of operations. b) Correction of immaterial asset retirement obligation (“ARO”) related to the Company’s previous Sunnyvale, California headquarters of approximately $1.0 million in fiscal year 2019 related to facility restoration costs. The Company originally recorded a liability for the ARO but expensed (included in sales, general and administrative expenses on the consolidated statements of operations) the entire amount in the year ended December 31, 2019. The Company corrected the consolidated financial statements to record the ARO asset within property, plant and equipment, net, within the consolidated balance sheets and reflect the amortization of the ARO asset over the remaining life of the lease of seven months beginning in December of 2019 through June 2020. c) Recording of provision for income taxes impacts due to adjustments a) and b) above. The restatement tables below present a reconciliation from the previously reported amounts to the restated amounts (in thousands, except shares and per share amounts). The amounts originally reported were derived from the Company’s Quarterly Report on Form 10-Q for the interim period ended June 30, 2020. Certain line items in the quarterly financial data below were excluded because they were not impacted by the restatement.
|  | For the Three Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Operations |  |  |  |  |  |
Revenue: |  |  |  |  |  |
Royalties |  | $ | 16,957 |  |  | $ | 1,787 |  |  | $ | 18,744 |
Total revenue |  | 59,930 |  |  | 1,787 |  |  | 61,717 |
Gross profit |  | 43,782 |  |  | 1,787 |  |  | 45,569 |
Operating expenses: |  |  |  |  |  |
Sales, general and administrative |  | 21,310 |  |  | 411 |  |  | 21,721 |
Total operating expenses |  | 56,246 |  |  | 411 |  |  | 56,657 |
Operating income (loss) |  | (12,464) |  |  | 1,376 |  |  | (11,088) |
Interest income and other income (expense), net |  | 4,597 |  |  | 91 |  |  | 4,688 |
Interest and other income (expense), net |  | 2,017 |  |  | 91 |  |  | 2,108 |
Income (loss) before income taxes |  | (10,447) |  |  | 1,467 |  |  | (8,980) |
Provision for (benefit from) income taxes |  | 334 |  |  | (174) |  |  | 160 |
Net income (loss) |  | (10,781) |  |  | 1,641 |  |  | (9,140) |
Net income (loss) per share: |  |  |  |  |  |
Basic |  | $ | (0.09) |  |  | $ | 0.01 |  |  | $ | (0.08) |
Diluted |  | $ | (0.09) |  |  | $ | 0.01 |  |  | $ | (0.08) |
|  | For the Six Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Operations |  |  |  |  |  |
Revenue: |  |  |  |  |  |
Royalties |  | $ | 36,651 |  |  | $ | 3,575 |  |  | $ | 40,226 |
Total revenue |  | 123,919 |  |  | 3,575 |  |  | 127,494 |
Gross profit |  | 91,886 |  |  | 3,575 |  |  | 95,461 |
Operating expenses: |  |  |  |  |  |
Sales, general and administrative |  | 44,205 |  |  | 822 |  |  | 45,027 |
Total operating expenses |  | 115,189 |  |  | 822 |  |  | 116,011 |
Operating income (loss) |  | (23,303) |  |  | 2,753 |  |  | (20,550) |
Interest income and other income (expense), net |  | 10,971 |  |  | 160 |  |  | 11,131 |
Interest and other income (expense), net |  | 5,836 |  |  | 160 |  |  | 5,996 |
Income (loss) before income taxes |  | (17,467) |  |  | 2,913 |  |  | (14,554) |
Provision for (benefit from) income taxes |  | 1,297 |  |  | (172) |  |  | 1,125 |
Net income (loss) |  | (18,764) |  |  | 3,085 |  |  | (15,679) |
Net income (loss) per share: |  |  |  |  |  |
Basic |  | $ | (0.17) |  |  | $ | 0.03 |  |  | $ | (0.14) |
Diluted |  | $ | (0.17) |  |  | $ | 0.03 |  |  | $ | (0.14) |
|  | For the Three Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Comprehensive Loss |  |  |  |  |  |
Net income (loss) |  | $ | (10,781) |  |  | $ | 1,641 |  |  | $ | (9,140) |
Total comprehensive income (loss) |  | (10,645) |  |  | 1,641 |  |  | (9,004) |
|  | For the Six Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Comprehensive Loss |  |  |  |  |  |
Net income (loss) |  | $ | (18,764) |  |  | $ | 3,085 |  |  | $ | (15,679) |
Total comprehensive income (loss) |  | (18,724) |  |  | 3,085 |  |  | (15,639) |
|  | For the Three and Six Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Stockholders’ Equity |  |  |  |  |  |
Net loss attributable to: |  |  |  |  |  |
Accumulated deficit |  | $ | (309,008) |  |  | $ | 7,540 |  |  | $ | (301,468) |
Total stockholders’ equity |  | 965,190 |  |  | 7,540 |  |  | 972,730 |
|  | For the Six Months Ended June 30, 2020
|  | As Originally Reported |  | Adjustments |  | As Restated
Condensed Consolidated Statement of Cash Flows |  |  |  |  |  |
Cash flows from operating activities: |  |  |  |  |  |
Net income (loss) |  | $ | (18,764) |  |  | $ | 3,085 |  |  | $ | (15,679) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |  |  |
Depreciation |  | 14,625 |  |  | 822 |  |  | 15,447 |
Deferred income taxes |  | 102 |  |  | (49) |  |  | 53 |
Change in operating assets and liabilities, net of effects of acquisitions: |  |  |  |  |  |
Unbilled receivables |  | 83,577 |  |  | (3,735) |  |  | 79,842 |
Prepaid expenses and other assets |  | 1,849 |  |  | (123) |  |  | 1,726 |
Net cash provided by operating activities |  | 99,273 |  |  | — |  |  | 99,273 |
Immaterial Correction of Prior-Period Error Subsequent to the reissuance of the consolidated financial statements as of and for the year ended December 31, 2020, the Company determined that $7.2 million in corporate investments originally classified as cash equivalents should have been classified as marketable securities in the consolidated balance sheet as of December 31, 2020. The Company assessed the effect of this correction based on an analysis of both quantitative and qualitative factors and determined that the correction was not material. Accordingly, the Company corrected the error as of December 31, 2020 in the accompanying condensed consolidated balance sheet and related footnotes. The following adjustments were made: •Cash and cash equivalents as of December 31, 2020 originally reported as $136.1 million was corrected to $129.0 million. •Marketable securities as of December 31, 2020 originally reported as $366.5 million was corrected to $373.6 million. •Correction of Note 7, “Marketable Securities” and Note 8, “Fair Value of Financial Instruments”, to reflect the above adjustments. Additionally, in the 10-K for the period ending December 31, 2021, the Company will correct its presentation of net cash used in investing activities for the year ended December 31, 2020, which was originally reported as $90.4 million, to reflect cash used in investing activities of $97.6 million. The corrections did not affect the net cash provided by operating activities nor net cash used in financing activities.

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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