This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 as described in more detail under "Note Regarding
Forward-Looking Statements." Our forward-looking statements are based on current
expectations, forecasts and assumptions and are subject to risks, uncertainties
and changes in condition, significance, value and effect. As a result of the
factors described herein, and in the documents incorporated herein by reference,
including, in particular, those factors described under "Risk Factors," we
undertake no obligation to publicly disclose any revisions to these
forward-looking statements to reflect events or circumstances occurring
subsequent to filing this report with the Securities and Exchange Commission.

The following discussion and analysis should be read in conjunction with the
unaudited condensed consolidated financial statements and related notes that are
included elsewhere in this report.

Rambus is a trademark of Rambus Inc. Other trademarks that may be mentioned in this quarterly report on Form 10-Q are the property of their respective owners.




Business Overview

Rambus produces products and innovations that address the fundamental challenges
of accelerating data. We make industry-leading chips and silicon IP that enable
critical performance improvements for data center and other growing markets. The
ongoing shift to the cloud, along with the widespread advancement of artificial
intelligence ("AI") across the data center, edge and Internet of Things ("IoT")
end points, has led to exponential growth in data usage and tremendous demands
on data infrastructure. Creating fast and safe connections, both in and across
systems, remains one of the most mission-critical design challenges limiting
performance in advanced hardware for these markets.

As an industry pioneer with over 30 years of advanced semiconductor design
experience, Rambus is ideally positioned to address the challenges of moving and
protecting data. We are a leader in high-performance memory subsystems,
providing chips, silicon IP and innovations that maximize the performance and
security in data-intensive systems. Whether in the cloud, at the edge or in your
hand, real-time and immersive applications depend on data throughput and
integrity. Rambus products and innovations deliver the increased bandwidth,
capacity and security required to meet the world's data needs and drive
ever-greater end-user experiences.

Rambus benefits from a balanced and diverse portfolio of offerings across chips,
silicon IP and patent licensing with each of them contributing at scale. From
2018 to 2021, product revenue sustained a 55% compound annual growth rate,
making products the leading revenue source for the Company. Driven by the
continued market momentum of our memory interface chips, we recognized record
product revenue of $143.9 million in 2021. The Company achieved silicon IP
growth through increasing design wins at leading system on chip ("SoC")
customers with contributions from the businesses acquired in 2021. In addition,
Rambus successfully closed key patent licensing agreements, solidifying our
foundation of sustained cash generation and fueling investment in our product
and technology roadmaps. Rambus continued its technology leadership with the
launch of the CXL Memory Interconnect Initiative and development of solutions
for next-generation data centers.

Executive Summary

The Company's continued execution delivered strong results during the third quarter, driven by continued demand in our memory interface chips and continued stability from our royalties revenue.

Key 2022 third quarter financial results included:

•Revenue of $112.2 million;

•Operating expenses of $68.3 million; and

•Net cash provided by operating activities of $80 million.

We had record quarterly product revenue of $58.6 million, which was primarily driven by our memory interface chips. We also initiated a $100 million accelerated share repurchase program.


                                       27
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Operational Highlights

Revenue Sources

The Company's consolidated revenue is comprised of product revenue, royalty revenue and contract and other revenue.



Product revenue consists primarily of memory interface chips and is an
increasingly growing part of our business. Our memory interface chips are sold
to major DRAM manufacturers, Micron, Samsung and SK hynix, as well as directly
to system manufacturers and cloud providers, for integration into server memory
modules. Product revenue accounted for 52% and 48% of our consolidated revenue
for the three and nine months ended September 30, 2022, as compared to 45% and
42% for the three and nine months ended September 30, 2021.

Royalty revenue is derived from our patent licenses, through which we provide
our customers certain rights to our broad worldwide portfolio of patented
inventions. Our patent licenses enable our customers to use a portion of our
patent portfolio in their own digital electronics products. The licenses
typically range in term up to ten years and define the specific field of use
where our customers may utilize our inventions in their products. Royalties may
be structured as fixed, variable or a hybrid of fixed and variable royalty
payments. Leading semiconductor and electronic system companies such as AMD,
Broadcom, Cisco, CXMT, IBM, Infineon, Kioxia, Marvell, Mediatek, Micron, Nanya,
NVIDIA, Panasonic, Phison, Qualcomm, Samsung, SK hynix, Socionext,
STMicroelectronics, Toshiba, Western Digital, Winbond and Xilinx have licensed
our patents. The vast majority of our patents originate from our internal
research and development efforts. Revenues from royalties accounted for 27% and
33% of our consolidated revenue for the three and nine months ended
September 30, 2022, as compared to 41% and 44% for the three and nine months
ended September 30, 2021.

Contract and other revenue consists primarily of Silicon IP, which is comprised
of our high-speed interface and security IP. Revenue sources under contract and
other include our IP core licenses, software licenses and related
implementation, support and maintenance fees and engineering services fees. The
timing and amounts invoiced to customers can vary significantly depending on
specific contract terms and can therefore have a significant impact on deferred
revenue or accounts receivable in any given period. Contract and other revenue
accounted for 21% and 19% of our consolidated revenue for the three and nine
months ended September 30, 2022, as compared to 14% for both the three and nine
months ended September 30, 2021.

Costs and Expenses



Cost of product revenue for the three months ended September 30, 2022, increased
approximately $8.8 million as compared to the same period in 2021. Cost of
product revenue for the nine months ended September 30, 2022 increased
approximately $24.8 million as compared to the same period in 2021. The increase
in both periods was primarily due to increases in sales volumes of our memory
interface chips during the periods.

Cost of contract and other revenue for the three months ended September 30,
2022, remained flat as compared to the same period in 2021. Cost of contract and
other revenue for the nine months ended September 30, 2022, decreased by
approximately $0.9 million as compared to the same period in 2021, primarily due
to lower engineering services associated with the contracts.

Research and development expenses continue to play a key role in our efforts to
drive our product innovations. Our research and development expenses for the
three months ended September 30, 2022 increased $3.7 million as compared to the
same period in 2021, primarily due to increased headcount-related expenses of
$1.6 million, engineering development tool costs of $1.0 million, stock-based
compensation expense of $0.6 million, consulting costs of $0.5 million and bonus
accrual expense of $0.5 million, offset by a decrease in retention bonus expense
related to acquisitions of $0.9 million and facilities costs of $0.5 million.
Our research and development expenses for the nine months ended September 30,
2022 increased $19.2 million as compared to the same period in 2021, primarily
due to increased headcount-related expenses of $7.5 million, consulting costs of
$2.6 million, engineering development tool costs of $2.4 million, stock-based
compensation expense of $2.0 million, bonus accrual expense of $1.5 million,
depreciation expense of $0.7 million, prototyping costs of $0.5 million and
allocated IT costs of $0.5 million, offset by a decrease in facilities costs of
$1.0 million.

Sales, general and administrative expenses for the three months ended
September 30, 2022 increased $4.0 million as compared to the same period in
2021, primarily due to increased bonus accrual expense of $0.9 million,
acquisition-related costs (including retention bonus expense) of $0.8 million,
stock-based compensation expense of $0.7 million, facilities costs of
$0.4 million, headcount-related expenses of $0.4 million and travel costs of
$0.3 million, offset by a decrease in consulting costs of $0.4 million. Our
sales, general and administrative expenses for the nine months ended
September 30, 2022 increased $11.5 million as compared to the same period in
2021, primarily due to increased headcount-related expenses of $2.9 million,
bonus accrual expense of $2.0 million, stock-based compensation expense of
$1.9 million, acquisition-related costs (including retention bonus expense) of
$1.6 million, facilities costs of $1.5 million, legal fees of $0.7 million,
accounting and audit fees of $0.6 million, recruiting expenses of $0.5 million
and travel costs of $0.5 million, offset by decreases in legal and accounting
costs of $3.0 million related to the shareholder activism activity and
restatement matters in 2021, and allocated IT costs of

                                       28
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$0.5 million.

Intellectual Property



As of September 30, 2022, our semiconductor, security and other technologies are
covered by 2,398 U.S. and foreign patents. Additionally, we had 617 patent
applications pending. Some of the patents and pending patent applications are
derived from a common parent patent application or are foreign counterpart
patent applications. We have a program to file applications for and obtain
patents in the United States and in selected foreign countries where we believe
filing for such protection is appropriate and would further our overall business
strategy and objectives. In some instances, obtaining appropriate levels of
protection may involve prosecuting continuation and counterpart patent
applications based on a common parent application. We believe our patented
innovations provide our customers with the ability to achieve improved
performance, lower risk, greater cost-effectiveness, and other benefits in their
products and services.

Impact of the COVID-19 Pandemic



The COVID-19 pandemic and new variants have created significant global economic
uncertainty and may adversely impact the business of our customers, partners and
vendors. The extent of the impact of the ongoing COVID-19 pandemic and
subsequent variants on our operational and financial performance will depend on
certain developments, including the duration and spread of the outbreak, impact
on our customers, suppliers, partners or employees, all of which are uncertain
and cannot be predicted. The extent to which the ongoing COVID-19 pandemic and
subsequent variants may impact our financial condition or results of operations
remains uncertain.


Trends

There are a number of trends that may have a material impact on us in the future, including but not limited to, the evolution of memory and SerDes technology, adoption of security solutions, the use and adoption of our inventions or technologies generally, industry consolidation and global economic conditions with the resulting impact on sales of consumer electronic systems.



We have a high degree of revenue concentration. Our top five customers
represented approximately 61% and 57% of our revenue for the three and nine
months ended September 30, 2022, as compared to 59% and 54% for the three and
nine months ended September 30, 2021, respectively. The particular customers
that account for revenue concentration have varied from period-to-period as a
result of the addition of new contracts, expiration of existing contracts,
renewals of existing contracts, industry consolidation and the volumes and
prices at which the customers have recently sold to their customers. These
variations are expected to continue in the foreseeable future.

Our revenue from companies headquartered outside of the United States accounted
for approximately 37% and 42% of our total revenue for the three and nine months
ended September 30, 2022, as compared to 32% and 38% for the three and nine
months ended September 30, 2021, respectively. We expect that revenue derived
from international customers will continue to represent a significant portion of
our total revenue in the future. Currently, our revenue from international
customers is denominated in U.S. dollars. For additional information concerning
international revenue, refer to Note 6, "Segments and Major Customers," of Notes
to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

The royalties we receive from our semiconductor customers are partly a function
of the adoption of our technologies by system companies. Many system companies
purchase semiconductors containing our technologies from our customers and do
not have a direct contractual relationship with us. Our customers generally do
not provide us with details as to the identity or volume of licensed
semiconductors purchased by particular system companies. As a result, we face
difficulty in analyzing the extent to which our future revenue will be dependent
upon particular system companies.

As a part of our overall business strategy, from time to time, we evaluate
businesses and technologies for potential acquisitions that are aligned with our
core business and designed to supplement our growth, including the acquisition
of Hardent, Inc. ("Hardent") in the second quarter of 2022, the 2021
acquisitions of AnalogX and PLDA, as well as the 2019 acquisitions of Northwest
Logic and the Secure Silicon IP and Protocols business from Verimatrix, formerly
Inside Secure. Similarly, we evaluate our current businesses and technologies
that are not aligned with our core business for potential divestiture, such as
the sale of our Payments and Ticketing businesses to Visa International Service
Association in 2019. We expect to continue to evaluate and potentially enter
into strategic acquisitions or divestitures which may adversely impact our
business and operating results.

                                       29
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Results of Operations



The following table sets forth, for the periods indicated, the percentage of
total revenue represented by certain items reflected on our unaudited condensed
consolidated statements of operations:

                                                                         Three Months Ended                                  Nine Months Ended
                                                                            September 30,                                      September 30,
                                                                     2022                        2021                   2022                   2021
Revenue:
Product revenue                                                              52.2  %                45.1  %                48.1  %                41.7  %
Royalties                                                                    26.6  %                40.7  %                32.6  %                43.9  %
Contract and other revenue                                                   21.2  %                14.2  %                19.3  %                14.4  %
Total revenue                                                               100.0  %               100.0  %               100.0  %               100.0  %
Cost of revenue:
Cost of product revenue                                                      19.5  %                16.2  %                18.3  %                15.2  %
Cost of contract and other revenue                                            1.3  %                 1.8  %                 0.9  %                 1.7  %
Amortization of acquired intangible assets                                    3.2  %                 4.7  %                 3.1  %                 5.4  %
Total cost of revenue                                                        24.0  %                22.7  %                22.3  %                22.3  %
Gross profit                                                                 76.0  %                77.3  %                77.7  %                77.7  %
Operating expenses:
Research and development                                                     35.0  %                43.8  %                35.7  %                42.0  %
Sales, general and administrative                                            23.3  %                27.3  %                23.9  %                28.7  %
Amortization of acquired intangible assets                                    0.4  %                 0.4  %                 0.4  %                 0.3  %

Restructuring charges                                                           -  %                   -  %                   -  %                 0.2  %
Change in fair value of earn-out liability                                    2.1  %                   -  %                (0.6) %                   -  %

Total operating expenses                                                     60.8  %                71.5  %                59.4  %                71.2  %
Operating income                                                             15.2  %                 5.8  %                18.3  %                 6.5  %
Interest income and other income (expense), net                               2.5  %                 3.4  %                 2.1  %                 3.4  %
Gain on fair value of equity security                                         3.2  %                   -  %                 1.1  %                   -  %
Loss on extinguishment of debt                                              (15.3) %                   -  %               (25.2) %                   -  %
Loss on fair value adjustment of derivatives, net                            (2.1) %                   -  %                (3.2) %                   -  %
Interest expense                                                             (0.4) %                (3.4) %                (0.4) %                (3.3) %
Interest and other income (expense), net                                    (12.1) %                   -  %               (25.6) %                 0.1  %
Income (loss) before income taxes                                             3.1  %                 5.8  %                (7.3) %                 6.6  %
Provision for income taxes                                                    2.3  %                 1.3  %                 1.8  %                 1.4  %
Net income (loss)                                                             0.8  %                 4.5  %                (9.1) %                 5.2  %


                                                                Three Months Ended                                               Nine Months Ended
                                                                   September 30,                      Change in                    September 30,                    Change in
(Dollars in millions)                                          2022                 2021              Percentage               2022               2021              Percentage
Total revenue:
Product revenue                                         $      58.6              $  36.7                     59.7  %       $    159.9          $  98.7                     62.1  %
Royalties                                                      29.9                 33.1                     (9.6) %            108.4            103.8                      4.4  %
Contract and other revenue                                     23.7                 11.5                    106.0  %             64.2             34.0                     88.4  %
Total revenue                                           $     112.2              $  81.3                     38.1  %       $    332.5          $ 236.5                     40.5  %


Product Revenue

Product revenue consists of revenue from the sale of memory and security
products. Product revenue increased approximately $21.9 million to $58.6 million
for the three months ended September 30, 2022, from $36.7 million for the same
period in 2021. Product revenue increased approximately $61.2 million to
$159.9 million for the nine months ended September 30, 2022, from $98.7 million
for the same period in 2021. The increase in both periods was primarily due to
continued market share gains of our memory interface chips.

                                       30
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We believe that product revenue will continue to increase for the remainder of
2022 as compared to 2021, mainly from the sale of our memory interface chips.
However, our ability to continue to grow product revenue is dependent on, among
other things, our ability to continue to obtain orders from customers, our
ability to meet our customers' demands and our ability to mitigate any supply
chain risk due to the ongoing COVID-19 pandemic and subsequent variants.

Royalties

Royalty revenue, which includes patent and technology license royalties, decreased approximately $3.2 million to $29.9 million for the three months ended September 30, 2022, from $33.1 million for the same period in 2021. Royalty revenue increased approximately $4.6 million to $108.4 million for the nine months ended September 30, 2022, from $103.8 million for the same period in 2021.The fluctuation in both periods was primarily due to the timing and structure of license renewals.



We are continuously in negotiations for licenses with prospective customers. We
expect patent royalties will continue to vary from period to period based on our
success in adding new customers, renewing or extending existing agreements, as
well as the level of variation in our customers' reported shipment volumes,
sales price and mix, offset in part by the proportion of customer payments that
are fixed or hybrid in nature. We also expect that our technology royalties will
continue to vary from period to period based on our customers' shipment volumes,
sales prices and product mix.

Contract and Other Revenue

Contract and other revenue consists of revenue from technology development
projects. Contract and other revenue increased approximately $12.2 million to
$23.7 million for the three months ended September 30, 2022, from $11.5 million
for the same period in 2021. Contract and other revenue increased approximately
$30.2 million to $64.2 million for the nine months ended September 30, 2022,
from $34.0 million for the same period in 2021. The increase in both periods was
primarily due to higher revenue associated with our Silicon IP offerings.

We believe that contract and other revenue will fluctuate over time based on our
ongoing technology development contractual requirements, the amount of work
performed, the timing of completing engineering deliverables and the changes to
work required, as well as new technology development contracts booked in the
future.

Cost of Product Revenue

                                                             Three Months Ended                                                 Nine Months Ended
                                                                September 30,                      Change in                      September 30,                      Change in
(Dollars in millions)                                       2022                 2021              Percentage                 2022                 2021

             Percentage
Cost of product revenue                              $     22.0               $  13.2                     66.9  %       $     60.8              $  36.0                     68.8  %


Cost of product revenue are costs attributable to the sale of memory and
security products. Cost of product revenue increased approximately $8.8 million
to $22.0 million for the three months ended September 30, 2022, from
$13.2 million for the same period in 2021. Cost of product revenue increased
approximately $24.8 million to $60.8 million for the nine months ended
September 30, 2022, from $36.0 million for the same period in 2021. The increase
in both periods was primarily due to increases in sales volumes of our memory
interface chips during the periods.

In the near term, we expect costs of product revenue to continue to be higher as
we expect to continue to have higher sales of our various products in 2022, as
compared to 2021.

Cost of Contract and Other Revenue



                                                            Three Months Ended                                                Nine Months Ended
                                                               September 30,                       Change in                    September 30,                   Change in
(Dollars in millions)                                      2022                  2021              Percentage               2022              2021              Percentage
Cost of contract and other revenue                 $      1.5                 $   1.5                        -  %       $     3.1          $   4.0                    (24.2) %


Cost of contract and other revenue reflects the portion of the total engineering
costs which are specifically devoted to individual customer development and
support services. Cost of contract and other revenue for the three months ended
September 30, 2022 remained flat as compared to the same period in 2021. Cost of
contract and other revenue for the nine months ended September 30, 2022
decreased by approximately $0.9 million as compared to the same period in 2021,
primarily due to lower engineering services associated with the contracts.

In the near term, we expect costs of contract and other revenue to vary from
period to period based on varying revenue recognized from contract and other
revenue.

                                       31
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Research and Development Expenses



                                                           Three Months Ended                                                 Nine Months Ended
                                                              September 30,                      Change in                      September 30,                     Change in
(Dollars in millions)                                     2022                 2021              Percentage                 2022                2021    

Percentage

Research and development expenses:



Research and development expenses                  $     36.1               $  33.0                      9.3  %       $    108.9             $  91.7                     18.8  %
Stock-based compensation                                  3.2                   2.6                     23.7  %              9.7                 7.7                     25.5  %
Total research and development expenses            $     39.3               $  35.6                     10.4  %       $    118.6             $  99.4                     19.3  %


Research and development expenses are those expenses incurred for the development of applicable technologies.



Total research and development expenses for the three months ended September 30,
2022 increased $3.7 million as compared to the same period in 2021, primarily
due to increased headcount-related expenses of $1.6 million, engineering
development tool costs of $1.0 million, stock-based compensation expense of
$0.6 million, consulting costs of $0.5 million and bonus accrual expense of
$0.5 million, offset by a decrease in retention bonus expense related to
acquisitions of $0.9 million and facilities costs of $0.5 million.

Total research and development expenses for the nine months ended September 30,
2022 increased $19.2 million as compared to the same period in 2021, primarily
due to increased headcount-related expenses of $7.5 million, consulting costs of
$2.6 million, engineering development tool costs of $2.4 million, stock-based
compensation expense of $2.0 million, bonus accrual expense of $1.5 million,
depreciation expense of $0.7 million, prototyping costs of $0.5 million and
allocated IT costs of $0.5 million, offset by a decrease in facilities costs of
$1.0 million.

In the near term, we expect research and development expenses to be higher as we
continue to make investments in the infrastructure and technologies required to
maintain our product innovation in semiconductor, security and other
technologies.

Sales, General and Administrative Expenses



                                                           Three Months Ended                                                 Nine Months Ended
                                                              September 30,                      Change in                      September 30,                      Change in
(Dollars in millions)                                     2022                 2021              Percentage                 2022                 2021              Percentage
Sales, general and administrative expenses:
Sales, general and administrative expenses         $     20.7               $  17.4                     18.7  %       $     64.2              $  54.7                     17.5  %

Stock-based compensation                                  5.5                   4.8                     15.3  %             15.2                 13.3                     14.3  %
Total sales, general and administrative
expenses                                           $     26.2               $  22.2                     18.0  %       $     79.4              $  68.0                     16.9  %


Sales, general and administrative expenses include expenses and costs associated
with trade shows, public relations, advertising, litigation, general legal,
insurance and other sales, marketing and administrative efforts. Consistent with
our business model, our licensing, sales and marketing activities aim to develop
or strengthen relationships with potential new and current customers. In
addition, we work with current customers through marketing, sales and technical
efforts to drive adoption of their products that use our innovations and
solutions, by system companies. Due to the long business development cycles we
face and the semi-fixed nature of sales, general and administrative expenses in
a given period, these expenses generally do not correlate to the level of
revenue in that period or in comparable recent or future periods.

Total sales, general and administrative expenses for the three months ended
September 30, 2022 increased $4.0 million as compared to the same period in
2021, primarily due to increased bonus accrual expense of $0.9 million,
acquisition-related costs (including retention bonus expense) of $0.8 million,
stock-based compensation expense of $0.7 million, facilities costs of
$0.4 million, headcount-related expenses of $0.4 million and travel costs of
$0.3 million, offset by a decrease in consulting costs of $0.4 million.

Total sales, general and administrative expenses for the nine months ended
September 30, 2022 increased $11.5 million as compared to the same period in
2021, primarily due to increased headcount-related expenses of $2.9 million,
bonus accrual expense of $2.0 million, stock-based compensation expense of
$1.9 million, acquisition-related costs (including retention bonus expense) of
$1.6 million, facilities costs of $1.5 million, legal fees of $0.7 million,
accounting and audit fees of $0.6 million, recruiting expenses of $0.5 million
and travel costs of $0.5 million, offset by decreases in legal and accounting
costs of $3.0 million related to the shareholder activism activity and
restatement matters in 2021, and allocated IT costs of $0.5 million.

                                       32
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In the future, sales, general and administrative expenses will vary from period
to period based on the trade shows, advertising, legal, acquisition and other
sales, marketing and administrative activities undertaken, and the change in
sales, marketing and administrative headcount in any given period. In the near
term, we expect our sales, general and administrative expenses to remain
relatively flat.

Amortization of Acquired Intangible Assets



                                                             Three Months Ended                                                 Nine Months Ended
                                                                September 30,                       Change in                     September 30,                      Change in
(Dollars in millions)                                       2022                  2021             Percentage                 2022                 2021             Percentage
Amortization of acquired intangible assets:
Amortization of acquired intangible assets
included in total cost of revenue                   $      3.6                 $   3.8                    (6.2) %       $     10.4              $  12.6                   (17.9) %
Amortization of acquired intangible assets
included in total operating expenses                       0.4                     0.4                        NM*              1.3                  0.8                    54.1  %
Total amortization of acquired intangible
assets                                              $      4.0                 $   4.2                    (3.9) %       $     11.7              $  13.4                   (13.5) %

_________________________________________

NM* - percentage is not meaningful



Amortization expense is related to various acquired IP. Amortization of acquired
intangible assets recognized in cost of revenue and operating expenses for the
three and nine months ended September 30, 2022 decreased as compared to the same
periods in 2021, primarily due to certain intangible assets being fully
amortized, partially offset by additional amortization from intangible assets
acquired in the first quarter of 2022, as well as intangible assets acquired as
part of the acquisition of Hardent in the second quarter of 2022.

Change in Fair Value of Earn-Out Liability



                                                               Three Months Ended                                                    Nine Months Ended
                                                                 September 30,                          Change in                      September 30,                     Change in
(Dollars in millions)                                        2022                    2021               Percentage                2022                2021               Percentage
Change in fair value of earn-out liability         $        2.4                   $      -                    100.0  %       $       (1.9)         $      -                    100.0  %


The change in the fair value of the earn-out liability related to the PLDA
acquisition, which is subject to certain revenue targets of the acquired
business for a period of three years from the date of acquisition, reflects the
first year earn-out achievement as well as the change in fair value relating to
the remaining two years of the earn-out period. As a result of these
adjustments, we recorded a net loss of $2.4 million and a net gain of
$1.9 million on our unaudited condensed consolidated statements of operations
during the three and nine months ended September 30, 2022, respectively.

Interest and Other Income (Expense), Net



                                                            Three Months Ended                                                  Nine Months Ended
                                                              September 30,                       Change in                       September 30,                      Change in
(Dollars in millions)                                     2022                  2021              Percentage                  2022                 2021              Percentage
Interest income and other income (expense),
net                                                $       2.8               $   2.7                      4.1  %       $       6.9              $   8.1                    (14.2) %
Gain on fair value of equity security                      3.5                     -                    100.0  %               3.5                    -                    100.0  %
Loss on extinguishment of debt                           (17.1)                    -                    100.0  %             (83.6)                   -                    100.0  %
Loss on fair value adjustment of
derivatives, net                                          (2.3)                    -                    100.0  %             (10.6)                   -                    100.0  %
Interest expense                                          (0.4)                 (2.7)                   (83.6) %              (1.4)                (8.0)                   (82.6) %
Interest and other income (expense), net           $     (13.5)              $   0.1                         NM*       $     (85.1)             $   0.1                         NM*


_________________________________________

NM* - percentage is not meaningful


                                       33
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Interest income and other income (expense), net, consists primarily of the loss
on extinguishment of debt of $83.6 million and $10.6 million loss on fair value
adjustment of derivatives, net, for the nine months ended September 30, 2022,
due to the repurchases of $162.1 million aggregate principal amount of our 2023
Notes during the first and third quarters of 2022 and the settlement of the
related convertible senior note hedges and warrants. Interest income and other
income (expense), net, also includes interest income due to the significant
financing component of licensing agreements, interest income generated from
investments in high quality fixed income securities, gain on fair value of
equity security, and any gains or losses from the re-measurement of our monetary
assets or liabilities denominated in foreign currencies.

Interest expense primarily consists of interest expense associated with the
non-cash interest expense related to the amortization of the debt issuance costs
on the 1.375% convertible senior notes due 2023 (the "2023 Notes"), as well as
the coupon interest related to these notes. Prior to the adoption of
ASU No. 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20)
and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)
on January 1, 2022, interest expense also included the non-cash interest expense
related to the amortization of the debt discount. Refer to Note 2, "Recent
Accounting Pronouncements," of Notes to Unaudited Condensed Consolidated
Financial Statements of this Form 10-Q for additional information on the
adoption of ASU No. 2020-06.

We expect our non-cash interest expense to decrease steadily as there will be no
additional non-cash interest related to the debt discount after the adoption of
ASU No. 2020-06 and as the non-cash interest expense related to the debt
issuance costs was reduced due to the repurchases of our 2023 notes in the first
and third quarters of 2022. Refer to Note 10, "Convertible Notes," of Notes to
Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for
additional information.

Provision for Income Taxes

                                                                Three Months Ended                                             Nine Months Ended
                                                                  September 30,                     Change in                    September 30,                     Change in
(Dollars in millions)                                       2022                   2021            Percentage              2022                  2021              Percentage
Provision for income taxes                              $    2.5                $   1.1              133.1%            $    5.9               $   3.2                     85.7  %
Effective tax rate                                          72.7   %               22.6  %                                (24.5)  %              20.7  %


The provision for income taxes reported for the three and nine months ended
September 30, 2022, was driven by a combination of the valuation allowance
recorded on U.S. deferred tax assets, foreign withholding taxes, the statutory
tax expense for the foreign jurisdictions for 2022 and indefinite-lived
intangible tax amortization expense. Our income tax provision for the three
months ended September 30, 2022 and 2021, reflected an effective tax rate of
72.7% and 22.6%, respectively. Our income tax provision for the nine months
ended September 30, 2022 and 2021, reflected an effective tax rate of (24.5)%
and 20.7%, respectively. Our effective tax rate for the three and nine months
ended September 30, 2022, differed from the U.S. statutory rate primarily due to
foreign tax credits and the full valuation allowance against U.S. deferred tax
assets. Our effective tax rate for the three and nine months ended September 30,
2021, differed from the statutory rate primarily due to foreign tax credits and
the full valuation allowance against U.S. deferred tax assets.

During the three months ended September 30, 2022 and 2021, we paid withholding
taxes of $5.5 million and $5.0 million, respectively. During the nine months
ended September 30, 2022 and 2021, we paid withholding taxes of $15.8 million
and $15.4 million, respectively.

We periodically evaluate the realizability of our net deferred tax assets based
on all available evidence, both positive and negative. We continue to maintain a
full valuation allowance on our U.S. federal and California deferred tax assets
as we do not expect to be able to fully utilize them.

We have U.S. federal deferred tax assets related to research and development
credits, foreign tax credits and other tax attributes that can be used to offset
U.S. federal taxable income in future periods. These credit carryforwards will
expire if they are not used within certain time periods. It is possible that
some or all of these attributes could ultimately expire unused.


Liquidity and Capital Resources



                                                                                            As of
                                                                             September 30,           December 31,
(In millions)                                                                    2022                    2021
Cash and cash equivalents                                                  $        141.6          $       107.9
Marketable securities                                                               123.2                  377.7
Total cash, cash equivalents and marketable securities                     

$ 264.8 $ 485.6


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                                                   Nine Months Ended
                                                     September 30,
(In millions)                                     2022           2021

Net cash provided by operating activities $ 179.1 $ 137.0 Net cash provided by investing activities $ 217.5 $ 1.1 Net cash used in financing activities $ (360.4) $ (114.9)

Liquidity



We currently anticipate that existing cash, cash equivalents and marketable
securities balances and cash flows from operations will be adequate to meet our
cash needs for at least the next 12 months. Additionally, the majority of our
cash and cash equivalents is in the United States. Our cash needs for the nine
months ended September 30, 2022, were funded primarily from cash collected from
our customers.

We do not anticipate any liquidity constraints as a result of either the current
credit environment or investment fair value fluctuations or the repayment of the
remaining 2023 Notes in February 2023. Additionally, we have the intent and
ability to hold our debt investments that have unrealized losses in accumulated
other comprehensive gain (loss) for a sufficient period of time to allow for
recovery of the principal amounts invested. We continually monitor the credit
risk in our portfolio and mitigate our credit risk exposures in accordance with
our policies.

As a part of our overall business strategy, from time to time, we evaluate businesses and technologies for potential acquisitions that are aligned with our core business and designed to supplement our growth.



To provide us with more flexibility in returning capital to our stockholders, on
October 29, 2020, our Board approved the 2020 Repurchase Program authorizing the
repurchase of up to an aggregate of 20.0 million shares. Share repurchases under
the 2020 Repurchase Program may be made through the open market, established
plans or privately negotiated transactions in accordance with all applicable
securities laws, rules, and regulations. There is no expiration date applicable
to the 2020 Repurchase Program.

On November 11, 2020, we entered into the 2020 ASR Program with Deutsche Bank.
The 2020 ASR Program was part of the 2020 Repurchase Program. Under the 2020 ASR
Program, we pre-paid to Deutsche Bank the $50.0 million purchase price for our
common stock and, in turn, we received an initial delivery of approximately
2.6 million shares of our common stock from Deutsche Bank in the fourth quarter
of 2020, which were retired and recorded as a $40.0 million reduction to
stockholders' equity. The remaining $10.0 million of the initial payment was
recorded as a reduction to stockholders' equity as an unsettled forward contract
indexed to our stock. During the second quarter of 2021, the accelerated share
repurchase program was completed and we received an additional 0.1 million
shares of our common stock, which were retired, as the final settlement of the
accelerated share repurchase program.

On June 15, 2021, we entered into the 2021 ASR Program with Deutsche Bank. The
2021 ASR Program was part of the 2020 Repurchase Program. Under the 2021 ASR
Program, we pre-paid to Deutsche Bank the $100.0 million purchase price for our
common stock and, in turn, we received an initial delivery of approximately
3.9 million shares of our common stock from Deutsche Bank in the second quarter
of 2021, which were retired and recorded as $80.0 million reduction to
stockholders' equity. The remaining $20.0 million of the initial payment was
recorded as a reduction to stockholders' equity as an unsettled forward contract
indexed to our stock. During the fourth quarter of 2021, the accelerated share
repurchase program was completed and we received an additional 0.4 million
shares of our common stock, which were retired, as the final settlement of the
accelerated share repurchase program.

On September 9, 2022, we entered into the 2022 ASR Program with Wells Fargo. The
2022 ASR Program was part of the 2020 Repurchase Program. Under the 2022 ASR
Program, we pre-paid to Wells Fargo the $100.0 million purchase price for our
common stock and, in turn, we received an initial delivery of approximately
3.1 million shares of our common stock from Wells Fargo in the third quarter of
2022, which were retired and recorded as a $80.0 million reduction to
stockholders' equity. The remaining $20.0 million of the initial payment was
recorded as a reduction to stockholders' equity as an unsettled forward contract
indexed to our stock. The 2022 ASR Program is expected to be completed during
the fourth quarter of 2022.

As of September 30, 2022, there remained an outstanding authorization to repurchase approximately 9.8 million shares of our outstanding common stock under the 2020 Repurchase Program. Refer to "Share Repurchase Program" below.

Operating Activities

Cash provided by operating activities of $179.1 million for the nine months ended September 30, 2022, was primarily attributable to the cash generated from customer licensing, product sales and engineering services fees. Changes in operating


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assets and liabilities for the nine months ended September 30, 2022, primarily
included decreases in unbilled receivable and accounts receivable and an
increase in accounts payable, offset by decreases in income taxes payable,
accrued salaries and benefits and other liabilities and deferred revenue, as
well as an increase in inventory.

Cash provided by operating activities of $137.0 million for the nine months
ended September 30, 2021, was primarily attributable to the cash generated from
customer licensing, product sales and engineering services fees. Changes in
operating assets and liabilities for the nine months ended September 30, 2021
primarily included decreases in unbilled receivables, inventories, prepaids and
other current assets and an increase in deferred revenue, offset by an increase
in accounts receivable, as well as decreases in income taxes payable, accrued
salaries and benefits and operating lease liabilities.

Investing Activities



Cash provided by investing activities of $217.5 million for the nine months
ended September 30, 2022, consisted of proceeds from the sale and maturities of
available-for-sale marketable securities of $276.7 million and $53.4 million,
respectively, offset by purchases of available-for-sale marketable securities of
$81.0 million, the acquisition of Hardent for $16.1 million, net of cash
acquired of $0.2 million, $12.7 million paid to acquire property, plant and
equipment and the acquisition of intangible assets for $3.0 million.

Cash provided by investing activities of $1.1 million for the nine months ended
September 30, 2021 consisted of proceeds from the maturities and sale of
available-for-sale marketable securities of $297.8 million and $227.0 million,
respectively, offset by purchases of available-for-sale marketable securities of
$419.1 million, $97.1 million paid for the acquisitions of AnalogX and PLDA, net
of total cash acquired of $8.6 million, and $7.5 million paid to acquire
property, plant and equipment.

Financing Activities



Cash used in financing activities of $360.4 million for the nine months ended
September 30, 2022, was primarily due to $258.1 million paid in connection with
the partial repurchases of our 2023 Notes in the first and third quarters of
2022, an aggregate payment of $100.4 million as part of our 2022 ASR program
(includes $0.4 million in fees related to the ASR program), $69.5 million paid
in connection with the settlement of warrants associated with the partial
repurchases of our 2023 Notes, $17.5 million in payments of taxes on restricted
stock units and $10.5 million paid under installment payment arrangements to
acquire fixed assets, offset by proceeds of $91.7 million from the settlement of
senior convertible note hedges associated with the partial repurchases of our
2023 Notes and $3.8 million in proceeds from the issuance of common stock under
equity incentive plans.

Cash used in financing activities of $114.9 million for the nine months ended
September 30, 2021 was primarily due to an aggregate payment of $100.0 million
to Deutsche Bank as part of the 2021 ASR Program. We also paid $10.0 million in
payments of taxes on restricted stock units, $9.8 million under installment
payment arrangements to acquire fixed assets and $0.1 million in fees related to
the 2021 ASR Program, offset by $5.0 million in proceeds from the issuance of
common stock under equity incentive plans.


Contractual Obligations



As of September 30, 2022, our material contractual obligations were as follows:

                                                              Remainder of
(In thousands)                                Total               2022               2023              2024              2025             2026

Contractual obligations (1) (2) (3)



Software licenses (4)                      $ 36,546          $     4,271

$ 14,166 $ 12,421 $ 5,688 $ - Acquisition retention bonuses (5)

             5,342                    -             2,500             2,500              342                -
Convertible notes (6)                        10,381                    -            10,381                 -                -                -
Interest payments related to
convertible notes                                71                    -                71                 -                -                -
Total                                      $ 52,340          $     4,271          $ 27,118          $ 14,921          $ 6,030          $     -


_________________________________________


(1)  The above table does not reflect possible payments in connection with
unrecognized tax benefits of approximately $21.6 million, including
$19.7 million recorded as a reduction of long-term deferred tax assets and
$1.9 million in long-term income taxes payable as of September 30, 2022. As
noted in Note 14, "Income Taxes," of Notes to Unaudited Condensed Consolidated
Financial Statements of this Form 10-Q, although it is possible that some of the
unrecognized tax benefits could be settled within the next 12 months, we cannot
reasonably estimate the outcome at this time.

                                       36
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(2) For our lease commitments as of September 30, 2022, refer to Note 9, "Leases," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

(3) Our other contractual obligations as of September 30, 2022 were not material.



(4)  We have commitments with various software vendors for agreements generally
having terms longer than one year. During the second quarter of 2022, we renewed
a software license agreement for engineering development tools, which is
included in the table above. As of September 30, 2022, approximately
$9.1 million of the fair value of this software license was included in other
current liabilities and $17.2 million was included in other long-term
liabilities, in the accompanying unaudited condensed consolidated balance sheet
of this Form 10-Q.

(5)  In connection with the acquisition of Northwest Logic in the third quarter
of 2019, the Secure Silicon IP and Protocols business in the fourth quarter of
2019, the acquisitions of AnalogX and PLDA in the third quarter of 2021, and the
acquisition of Hardent in the second quarter of 2022, we are obligated to pay
retention bonuses to certain employees subject to certain eligibility and
acceleration provisions, including the condition of employment.

(6) During the nine months ended September 30, 2022, we repurchased $162.1 million aggregate principal amount of our 2023 Notes, refer to Note 10, "Convertible Notes," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Share Repurchase Program



On October 29, 2020, our Board approved the 2020 Repurchase Program authorizing
the repurchase of up to an aggregate of 20.0 million shares. Share repurchases
under the 2020 Repurchase Program may be made through the open market,
established plans or privately negotiated transactions in accordance with all
applicable securities laws, rules, and regulations. There is no expiration date
applicable to the 2020 Repurchase Program. During the nine months ended
September 30, 2022, we repurchased shares of our common stock under the 2020
Repurchase Program as discussed below.

On November 11, 2020, we entered into the 2020 ASR Program with Deutsche Bank.
The 2020 ASR Program was part of the 2020 Repurchase Program. Under the 2020 ASR
Program, we pre-paid to Deutsche Bank the $50.0 million purchase price for our
common stock and, in turn, we received an initial delivery of approximately
2.6 million shares of our common stock from Deutsche Bank in the fourth quarter
of 2020, which were retired and recorded as a $40.0 million reduction to
stockholders' equity. The remaining $10.0 million of the initial payment was
recorded as a reduction to stockholders' equity as an unsettled forward contract
indexed to our stock. During the second quarter of 2021, the accelerated share
repurchase program was completed and we received an additional 0.1 million
shares of our common stock, which were retired, as the final settlement of the
accelerated share repurchase program.

On June 15, 2021, we entered into the 2021 ASR Program with Deutsche Bank. The
2021 ASR Program was part of the share repurchase program previously authorized
by our Board on October 29, 2020. Under the 2021 ASR Program, we pre-paid to
Deutsche Bank the $100.0 million purchase price for our common stock and, in
turn, we received an initial delivery of approximately 3.9 million shares of our
common stock from Deutsche Bank in the second quarter of 2021, which were
retired and recorded as a $80.0 million reduction to stockholders' equity. The
remaining $20.0 million of the initial payment was recorded as a reduction to
stockholders' equity as an unsettled forward contract indexed to our stock.
During the fourth quarter of 2021, the accelerated share repurchase program was
completed and we received an additional 0.4 million shares of our common stock,
which were retired, as the final settlement of the accelerated share repurchase
program.

On September 9, 2022, we entered into the 2022 ASR Program with Wells Fargo. The
2022 ASR Program was part of the share repurchase program previously authorized
by our Board on October 29, 2020. Under the 2022 ASR Program, we pre-paid to
Wells Fargo the $100.0 million purchase price for our common stock and, in turn,
we received an initial delivery of approximately 3.1 million shares of our
common stock from Wells Fargo in the third quarter of 2022, which were retired
and recorded as a $80.0 million reduction to stockholders' equity. The remaining
$20.0 million of the initial payment was recorded as a reduction to
stockholders' equity as an unsettled forward contract indexed to our stock. The
number of shares to be ultimately purchased by us will be determined based on
the volume-weighted-average price of our common stock during the terms of the
transaction, minus an agreed upon discount between the parties. The 2022 ASR
Program is expected to be completed during the fourth quarter of 2022.

As of September 30, 2022, there remained an outstanding authorization to repurchase approximately 9.8 million shares of our outstanding common stock under the 2020 Repurchase Program.



We record share repurchases as a reduction to stockholders' equity. We record a
portion of the purchase price of the repurchased shares as an increase to
accumulated deficit when the price of the shares repurchased exceeds the average
original proceeds per share received from the issuance of common stock.

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Warrants



In connection with the 2023 Notes, we separately entered into privately
negotiated warrant transactions, whereby we sold warrants (the "Warrants") to
certain counterparties (the "Counterparties") to acquire, collectively, subject
to anti-dilution adjustments, approximately 9.1 million shares of our common
stock at an initial strike price of approximately $23.30 per share, which
represents a premium of 60% over the last reported sale price of our common
stock of $14.56 on November 14, 2017. We received aggregate proceeds of
approximately $23.2 million from the sale of the Warrants to the Counterparties.
The Warrants are separate transactions and are not part of the 2023 Notes or
Convertible Note Hedge Transactions. The holders of the 2023 Notes and
Convertible Note Hedge Transactions will not have any rights with respect to the
Warrants.

During the first quarter of 2022 and in connection with the Q1 2022 Partial
Notes Repurchase, we entered into agreements with certain financial institutions
to retire the corresponding portions of warrants we had previously entered into
with the counterparties in connection with the issuance of the 2023 Notes. Upon
settlement, we paid $55.1 million in cash for the retirement of the
proportionate amount of warrants during the three months ended March 31, 2022.

During the third quarter of 2022 and in connection with the Q3 2022 Partial
Notes Repurchase, we entered into agreements with certain financial institutions
to retire the corresponding portions of warrants we had previously entered into
with the counterparties in connection with the issuance of the 2023 Notes. Upon
settlement, we paid $14.4 million in cash for the retirement of the
proportionate amount of warrants during the three months ended September 30,
2022.

Upon entering into the Q1 2022 and Q3 2022 Partial Notes Repurchase agreements,
the conversion feature related to the 2023 Notes repurchased, as well as the
settlements of the convertible senior note hedges and warrants, were subject to
derivative accounting.

Refer to Note 10, "Convertible Notes," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for additional information.

Critical Accounting Policies and Estimates



The discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses, and related disclosure of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates, including those
related to revenue recognition, investments, income taxes, litigation and other
contingencies. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions. Our critical accounting estimates include those
regarding (1) revenue recognition, (2) goodwill, (3) intangible assets,
(4) income taxes, (5) stock-based compensation and (6) business combinations.
For a discussion of our critical accounting estimates, see "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K
for the year ended December 31, 2021.


Recent Accounting Pronouncements

Refer to Note 2, "Recent Accounting Pronouncements," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for discussion of recent accounting pronouncements including the respective expected dates of adoption.

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