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A fabless designer of memory interface chips and silicon IP that keep fast-moving data flowing, its DDR5 and LPDDR5 chipsets plus controller and security cores power data center and AI systems for chip makers and server builders. Founded in 1990 by engineers Mark Horowitz and Mike Farmwald to close the widening gap between processor and memory speeds, the company's name often draws playful comparisons to action hero Rambo—though the similarity is purely coincidental.
Royalty revenue rebounded 23% in Q2 2026, reversing a Q1 decline, while product revenue growth accelerated to 22%.
Royalty returned to growth after a first-quarter decline. Total revenue rose 20% to $207.4 million and fell 2% to $61.8 million, as a 36% increase in SG&A costs from higher professional fees and a $3.3 million offset the revenue gain. The company is cutting headcount to lower expenses, even as it faces a new federal antitrust investigation.
Key takeaways
Royalty rose 23% to $84.2 million, rebounding from a 6% decline in Q1 2026, driven by the timing and structure of license agreements and renewals.
Product rose 22% to $99.2 million, a record, on higher memory interface chip volumes and contributions from new products, accelerating from 15% growth in the prior quarter.
fell 2% to $61.8 million and narrowed 3.6 points to 34.3%, as SG&A expenses rose 36% primarily due to a $7.0 million increase in professional fees.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 20% to $207.4M on strong memory interface chip sales and higher royalties, while SG&A jumped 36% on professional fees.
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Total grew 20.4% to $207.4M, driven by a 22% increase in product revenue to $99.2M from higher memory interface chip volumes and new products.
Royalties rose 22.8% to $84.2M due to the timing and structure of license agreements and renewals, while contract and other revenue increased 7.6% to $24.0M on higher Silicon IP activity.
The company recorded a $3.3 million for workforce reductions, aimed at lowering future operating expenses and improving profitability.
was $83.2 million for the quarter, down 17% sequentially, while total cash and investments reached $824.9 million with no .
A new risk disclosure reveals the company is responding to a U.S. Department of Justice criminal antitrust investigation via a federal grand jury subpoena.
What changed
Royalty returned to growth at 23% in Q2 2026, after the first decline of 6% in Q1 2026 that had been flagged as a key watch item since the license-renewal cycle began.
Product growth accelerated to 22% from 15% in Q1 2026, sustaining the expansion that earlier filings had questioned would plateau after five quarters of acceleration through Q3 2025.
narrowed for a second consecutive quarter, to 34.3% from 37.9% in Q4 2025, as expense growth continued to outpace growth—a trajectory flagged in prior quarters.
The company initiated a restructuring program with $3.3 million in charges, the first such action since the $9.4 million in charges taken in 2023, signaling a renewed effort to control the rising operating expense base.
What to watch
Whether the Q2 2026 royalty rebound is sustained or proves to be a one-quarter lift, given the company's ongoing warning that license agreements may convert to fully paid-up status.
The trajectory of SG&A expenses after the $7.0 million increase in professional fees and the $3.3 million , and whether the workforce reduction meaningfully lowers the expense base in Q3 2026.
Any developments in the U.S. Department of Justice criminal antitrust investigation, including the scope of the subpoena and potential financial or operational impact.
Whether product growth can maintain its 22% pace or begins to decelerate as the DDR5 memory interface chip cycle matures.
was roughly flat at 79.7%, as cost of product rose 22.1% in line with higher chip sales volumes.
Operating expenses increased sharply, with R&D up 10.3% on headcount and prototyping investments, and SG&A up 36.1% primarily due to a $7.0M increase in professional fees.
A Q2 restructuring program resulted in $3.3M in charges for workforce reductions aimed at lowering operating expenses and improving future profitability.
Cash and investments totaled $824.9M at quarter-end; was $144.5M for the first half, and the company repurchased an immaterial number of shares under its existing authorization.
Quantitative and Qualitative Disclosures About Market Risk
Primary market risk is interest rate sensitivity on a $747.3M fixed-income portfolio, with a 1% rate rise reducing fair value by ~$4.3M.
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The company’s main financial market risk is interest rate fluctuation affecting its $747.3 million investment portfolio of fixed-income securities.
It mitigates interest rate risk by investing only in highly rated, liquid instruments and biasing the portfolio toward shorter maturities.
A hypothetical immediate 1.0% increase in market interest rates would decrease the portfolio’s by approximately $4.3 million.
The corporate investment policy sets strict credit-quality and concentration limits, including a $15.0 million or 10% cap per non-U.S. government issuer.
The company invoices mostly in U.S. dollars and considers its foreign currency exposure immaterial, so it does not use foreign currency hedging.
We are not currently a party to any material pending legal proceeding; however, from time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicte…
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We are not currently a party to any material pending legal proceeding; however, from time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management attention and resources and other factors.
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Customer concentration, cyclical end-markets, and reliance on licensing and third-party manufacturing are the most material risks.
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is highly concentrated: the top five customers represented 64% of revenue in H1 2026, and loss of any major customer could substantially decrease revenue.
The business is exposed to highly cyclical semiconductor and DRAM markets, where rapid technological change, price erosion, and unpredictable AI-driven demand create volatility.
A meaningful portion of future depends on sustaining or growing licensing revenue, but licensing cycles are lengthy, costly, and some agreements may convert to fully paid-up licenses, ending future royalties.
The company relies on third parties for manufacturing and supply chain; any disruption, capacity constraint, or geopolitical pressure (e.g., China-Taiwan tensions) could materially impair product shipments.
Newly emphasized risks include responding to a U.S. Department of Justice criminal antitrust subpoena and uncertainty from evolving U.S. trade restrictions, tariffs, and export controls that could limit sales or increase costs.
International operations generated 84% of H1 2026 , exposing the company to currency fluctuations, trade barriers, and geopolitical instability, particularly in Asia and Europe.