RAMBUS INC Fair Value Disclosure
9. Fair Value of Financial Instruments
The following table presents the financial instruments and liabilities that are carried at fair value and summarizes their valuation by the respective pricing levels detailed in Note 2, “Summary of Significant Accounting Policies,” as of December 31, 2025 and 2024:
|
|
As of December 31, 2025 |
|
|||||||||||||
(In thousands) |
|
Total |
|
|
Quoted Market |
|
|
Significant |
|
|
Significant |
|
||||
Assets carried at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
47,277 |
|
|
$ |
47,277 |
|
|
$ |
— |
|
|
$ |
— |
|
Time deposits |
|
|
15,540 |
|
|
|
— |
|
|
|
15,540 |
|
|
|
— |
|
U.S. Government bonds and notes |
|
|
178,297 |
|
|
|
— |
|
|
|
178,297 |
|
|
|
— |
|
Non-U.S. Government bonds and notes |
|
|
3,983 |
|
|
|
— |
|
|
|
3,983 |
|
|
|
— |
|
Corporate bonds, commercial paper and notes |
|
|
448,901 |
|
|
|
— |
|
|
|
448,901 |
|
|
|
— |
|
Total assets carried at fair value |
|
$ |
693,998 |
|
|
$ |
47,277 |
|
|
$ |
646,721 |
|
|
$ |
— |
|
|
|
As of December 31, 2024 |
|
|||||||||||||
(In thousands) |
|
Total |
|
|
Quoted Market |
|
|
Significant |
|
|
Significant |
|
||||
Assets carried at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
6,025 |
|
|
$ |
6,025 |
|
|
$ |
— |
|
|
$ |
— |
|
Time deposits |
|
|
12,870 |
|
|
|
— |
|
|
|
12,870 |
|
|
|
— |
|
U.S. Government bonds and notes |
|
|
220,056 |
|
|
|
— |
|
|
|
220,056 |
|
|
|
— |
|
Corporate bonds, commercial paper and notes |
|
|
155,432 |
|
|
|
— |
|
|
|
155,432 |
|
|
|
— |
|
Total assets carried at fair value |
|
$ |
394,383 |
|
|
$ |
6,025 |
|
|
$ |
388,358 |
|
|
$ |
— |
|
The Company’s liabilities related to earn-out consideration are classified within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs. The following table presents additional information about liabilities measured at fair value for which the Company utilizes Level 3 inputs to determine fair value, as of December 31, 2024:
|
|
Years Ended December 31, |
|
|||||
(In thousands) |
|
2024 |
|
|
2023 |
|
||
Balance as of beginning of period |
|
$ |
12,500 |
|
|
$ |
14,800 |
|
Change in fair value of earn-out liability due to remeasurement |
|
|
(5,044 |
) |
|
|
9,234 |
|
Change in fair value of earn-out liability due to achievement of revenue target |
|
|
(7,456 |
) |
|
|
(11,534 |
) |
Balance as of end of period |
|
$ |
— |
|
|
$ |
12,500 |
|
For the years ended December 31, 2024 and 2023, the changes in the fair value of the earn-out liability related to the 2021 acquisition of PLDA, which was subject to certain revenue targets of the acquired business for a period of three years from the date of acquisition, and which was settled annually in shares of the Company’s common stock based on the fair value of that common stock fixed at the time the Company acquired PLDA. The fair value of the earn-out liability was remeasured each quarter, depending on the acquired business’s revenue performance relative to target over the applicable period, and adjusted to reflect changes in the per share value of the Company’s common stock. The Company classified its liability for the contingent earn-out liability related to the PLDA acquisition within Level 3 of the fair value hierarchy because the fair value calculation included significant unobservable inputs, such as revenue forecast, revenue volatility, equity volatility and weighted average cost of capital. During the years ended December 31, 2024 and 2023, the Company remeasured the fair value of the earn-out
liability, which resulted in a reduction of $5.0 million and additional expense of $9.2 million, respectively, in the Company’s Consolidated Statements of Income. The final earn-out was achieved in the third quarter of 2024 and fully paid during the fourth quarter of 2024.
The Company monitors its investments for impairment and records appropriate reductions in carrying value when necessary. During the years ended December 31, 2025 and 2024, the Company recorded no other-than-temporary impairment charges on its investments.
In 2018, the Company made an investment in a non-marketable equity security of a private company. This investment was accounted for under the equity method of accounting, and the Company accounted for its equity method share of the income on a quarterly basis. During the fourth quarter of 2023, the Company sold its 25.0% ownership share in the equity investment for approximately $25.0 million, which was included, net of withholding taxes paid, in prepaid and other current assets in the Company’s Consolidated Balance Sheet as of December 31, 2023. The Company recognized a gain of $25.0 million related to the sale of the Company’s 25.0% ownership share in the non-marketable equity security. The gain was offset by transaction costs of approximately $1.1 million, resulting in a net gain of approximately $23.9 million, which was included in the Company’s Consolidated Statement of Income for the year ended December 31, 2023. Subsequently, the Company received proceeds, net of tax, of approximately $22.8 million from this transaction during the first quarter of 2024.
During the years ended December 31, 2025 and 2024, there were no transfers of financial instruments between different categories of fair value.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 19, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.