Good day, ladies and gentlemen, and welcome to the Rambus, Inc. Q4 2014 Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would like to introduce your host for today's conference Mr. Satish Rishi. Sir, you may begin.

Thank you, operator and welcome to the Rambus fourth quarter and full year 2014 results conference call. I'm Satish Rishi, CFO, and on the call with me today is Dr. Ronald Black, our President and CEO. The press release for the results that will be discussed here today have been filed with the SEC on Form 8-K. A replay of this call will be available for the next week at (855) 859-2056. You can hear the replay by dialing the toll-free number and then entering ID number 64238473 when you get the prompt. In addition, we are simultaneously webcasting this call, and along with the audio, we're webcasting slides. So even if you're joining us via conference call, you may want to access the website for the slide presentation. A replay of this call can be accessed on our website beginning today at 5:00 p.m. Pacific Time. In an effort to provide greater clarity in our financials, we're using both GAAP and non-GAAP pro forma numbers in our press release and on this call. I need to advise you that the discussion today will contain forward-looking statements regarding our financial prospects and demand for our technologies, among other things. These statements are subject to risks and uncertainties that are discussed during the call and may be more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs, and 10-Ks. These forward-looking statements may differ materially from our actual results, and we are under no obligation to update these statements. Further, as mentioned, we will discuss non-GAAP financial results today and have posted on our website reconciliations of these non-GAAP financials to the most directly comparable GAAP measures. You can find a copy of our earnings release and the reconciliation on our website at rambus.com on the Investor Relations page under Financial Releases. Now, I'll turn the call over to Ron to provide an overview of the quarter and for the full year. Ron?

Thank you, Satish, and good afternoon, everyone. We were pleased with the fourth quarter achieving revenues of $72 million in line with our guidance and pro forma operating income of $27 million at the higher end of our guidance. For the full year, revenues were $297 million, in line with the guidance we set out in January of 2014 and pro forma operating income was $190 million, a significant increase over 2013, and of course we were GAAP profitable again in this quarter and therefore the full year, generating significant cash in the process. As important as our very good financial performance was, the success we've had in continuing to transform the business through collaboration with customers is equally notable. Our launch of CryptoManager with Qualcomm was probably the highlight of the year in this respect, showing that Rambus can attract marquee customers with our semiconductor IP solutions. If you attended in person or listened online to any of the investor conferences we presented at in 2014, you'll probably recall our theme of making our semiconductor IP more consumable. CryptoManager does just that as it includes the cryptographic process or core that is easily integrated into any chip, combined with secure servers or infrastructure as we often call it to inject cryptographic keys into the processor as well as enterprise-class software to manage the infrastructure remotely. CryptoManager is truly an end-to-end solution that delivers our semiconductor IP in the most consumable manner possible, and it shows that Rambus is a thought leader in security. On the memory side, we eluded to an architectural project and an MOU with a significant customer as well as interest in this project by a second major customer, which should make it clear to all that the project is not custom, but broadly applicable to…

Thanks Ron. I would like to remind everybody that for this call and for internal assessment, we use non-GAAP pro forma numbers to discuss our operating results as well as a forward looking projects, which we believe are indicative of complete performance as it includes certain cash events and excludes certain noncash and discrete events such as stock-based compensation, amortization, impairment and restructuring charges as we believe these are not indicative of long-term performance. As noted earlier, we will provide reconciliations on most comparable GAAP measures on our website. In the case of any forward looking projections or estimates containing non-GAAP information discussed on this call, reconciliation may not be available due to the unreasonable effort to make such a determination or provide such information as more fully described on the website. The company has made progress on our financial milestones and 2014 was the first year since 2010 when we were GAAP profitable for the full year. The team did a great job in managing expenses that allowed us profitable growth year-over-year. Let me review some of the financial highlights for the fourth quarter and the full year. Revenue for the fourth quarter was $72 million within our guidance of $70 million to $75 million, a 3.3% sequential increase and for the full year, revenue was $296.6 million, an increase of 9.2% year-over-year. Due to slower than expected headcount addition in the quarter and the gain of sale from patents, cost of revenue plus operating expenses or what I will refer to as total operating expenses for the quarter came in at $44.6 million slightly below our guidance of $46 million to $49 million and $0.5 million decrease from Q3. For the full year, total operating expenses were $177.4 million lower than the run rate we had forecast at…

Thank you. [Operator Instructions] Our first question comes from Suji De Silva of Topeka. Your line is open.

Hi Ron and hi Satish. Congratulations on another strong year that you had. In terms of the linearity of '15, should it still be a frontend versus backend loaded revenue ramp here with the typical security seasonality?

We think second half would be more backend loaded. It will be -- the linearity might be reversed this quarter, because the last year, if you recall, we had more one-time payments in the first half. Without making any assumptions of one-time payments, we expect the second half to be higher than the first half in 2015.

Okay. And then can you talk about the gaming console business, whether there's still a headwind into the first quarter? And what the year-over-year compare 2015 versus 2014 might be like for that business?

Yeah, it’s just a -- it’s a much smaller number. It’s almost like we don’t even talk about it. So in 2015, the guidance we have given you, it does include our best estimate for 2015, but we expect the revenue stream from PS3 to be tapering down. It will probably be asymptotic as they are sold to at lower prices in other parts of the world, but I haven’t broken down what the impact from that is year-over-year, but it’s -- it’s let’s say low-single digit to -- let’s say between $10 million to $15 million what the impact is year-over-year. Q –Suji De Silva: Great. That helps, and the last one maybe for Ron. on DRAM and the R+ business…

Hi. Sorry Suji, just to correct on that, it's probably in the mid-to-high single digits.

Okay. Mid-to-high single digits.

Yeah.

Okay. And then maybe a last question for Ron, perhaps can you talk about the DRAM business, the R+ business, and maybe what has or hasn't happened to your expectations thus far and what the setup is like for that technology to track going forward?

Sure, it’s really hard to separate between the R+ from the Serial Link, so the [security is] [ph] class technology and the DDR, because a lot of the times, we're discussing with customers on both. As I reflected in the prepared remarks, we’ve been -- we were somewhat on a hiatus from that for a series of reasons several years into the company, disengaged from that marketplace, which quite candidly I think was a mistake, and when we started two-and-a-half years ago, we concluded that this was a very attractive market and that we should get our focus back on dealing with customers. It is a very natural evolution from the parts that we’ve designed to really build our semiconductor IP portfolio, and so it’s a great unit of commerce to license, but it took time. When you exit a market, oftentimes customers are a little bit concerned that you're going to do it again. So we had to earn their trust, and what happened over 2014 is we built that trust and as we said, there was four new designs, which I was very pleasantly surprised about at the end of the year and we have several more that are in the hopper that we are hoping to close in this quarter and the coming quarters. So I think it has just taken time for us to get over the natural trepidation that customers have when you exit a business and then try to re-enter it, and as I said that we've earned their trust and respect and that they are counting on us to deliver our great IP form.

Right. Thanks guys.

Thank you. And our next question comes from Gary Mobley of Benchmark. Your line is open.

Hi guys. Let me extend my congratulations as well to a strong finish to the year, and looking specifically at CRI, that was a great growth -- great growth numbers for the year. I think Ron, what 50% year-over-year. Do you expect CRI to continue to be the main growth engine for 2015?

Well, it will. We expect it to be growing in 2015 also. So, I don’t know what do you mean by the only -- it won’t be the only growth engine. We have other factors as we are look into the second half of the year where we expect growth to be coming, and CRI definitely would be a good contributor to the growth.

Okay. The second half growth in revenue, is that a function of maybe some millstone revenue recognition relating to CryptoManager, and can you give us an update on the development of CryptoManager. Are you ahead of schedule, behind schedule, or on target?

Everything continues on plan. We are always trying to make sure we keep up with the customers’ expectations, but the team is executing and delivering to the milestone, so that’s about on track. With respect to the actual sequencing of the revenue and revenue recognition, that’s probably a part of it, but I -- Satish, do you know specifically?

Well with some of the design wins that we’ve gotten, we have some backend revenue. We also have some expectations on signing newer contracts later in the year. So those are all of the items we built into second half growth compared to the first half. So we expect second half to be higher. As Ron mentioned, with the collaboration we have, we are seeing more traction, so we get more NRE. We can recognize more revenue in that period. So we have milestones internally, and we did sign two towards the end of Q4. So not significant to have any impact in Q4, but expectation is that our design teams and our sales team and engineers will win more designs as the year progresses and as those NREs layer up, we see a growth in the second half as compared to the first half of the year.

Okay. And I wanted to ask some additional questions about Resistive RRAM. Congratulations on the Tezzaron agreement. I'm wondering whether or not the specific product license by Tezzaron had anything to do with the collaboration you announced with Freescale, dating back to 2013. And do you view licensing opportunity for Resistive RRAM as being something substantial? Or is it more important as an underpin for future license agreements as those renewals come up with memory licensees?

Gary, its Ron, I think it’s really both. We have very modest expectations of it because it typically takes long time to roll it out flash technology with 2.5D or 3D continues to do rather well. On the other hand, the performance of resistance RRAM has been very good. We have a lot of customers that we are working with. We just haven’t announced anything. I don’t expect that this is going to be a significant revenue generator in the short term but the performance of it especially as you tune, it could be very interesting. Probably the biggest hurdle in terms of opening it up is getting the high temperature stability. So in consumer applications, I think the existing temperature ranges that we have are fine but they really hit industrial and automotive grade. We are going to have to continue to tweak or with -- our customer is going to have to continue to tweak with itself to really ensure that they are stable. So if we can get pass that, I can see it becoming mainstream rather quickly. I think it is something that will be attractive. It seems to me that that resistance RRAM is just gaining interest compared with face change and spin-torque transfer magnetic RAM but we will have to -- to wait and see how that goes.

Okay. That’s it for me. Thanks guys.

Thank you. Our next question comes from Sundeep Bajikar of Jefferies. Your line is open.

Hi guys. Thanks for taking my question. First, just to make sure I heard you correctly, that we should expect to see additional licensing activity for CryptoManager in the second half of 2015? If you could just confirm I heard that correctly? And related to that, how should we think of the Secure Content opportunity with the CryptoManager backdrop? Any parallels you can draw on potential opportunities with respect to the model you have of CryptoManager would be great. And also any comment with respect to potential timing of the Secure Content opportunity. Thanks.

Sure Sundeep. I'll take the first part of your question and Ron will talk about the Secure element portion of it. So just to clarify, we didn’t say that we see additional licensing opportunities in Crypto Manager. I said, we see additional licensing opportunities from different businesses -- it could be from Cryptography. Could be from MID, could be from other area. So it is not just limited only to CryptoManager per say. Ron, secure element.

Yeah with respect to CryptoManager, the applicability of the platform transcends almost everything. So we’ve had interest in it from customers that see it as a provisioning and key management system for the internet of things. It’s not particularly set up to do anything for the Secure Content Storage Association although key issuance centers are the type of thing that we can do. We’ve obviously defined the spec -- we've been opening the path for the Secure Content Storage Association. And I think it’s more about how they're going to choose to deliver the content and whether you need to have something like CryptoManager for doing it remotely or real time over the year as opposed to something that is done in a different mechanism. So CryptoManager can be used in almost an infinite number of configurations as we have said repeatedly, our focus is really supporting the semiconductor industry today and really trying to deliver an improved way to configure and document and secure the manufacturing supply chain but it can be used in downstream applications for almost anything. So it’s really -- it can be customized in any form that you want and we are talking to all sorts of customers but our primary interest today is in the mobile space and with the customers that define mobile chipset.

Okay. Great. Thanks Ron. Just one kind of broader question. So beyond CryptoManager, how would you kind of rank the other major growth drivers in 2015?

In 2015?

Yeah.

I don't break it down that way. Do you have -- is there something?

Well, we have like the last you mentioned, record design wins on MID and towards the end of Q4 and we also had anti-counterfeiting which is on the crypto -- on the cryptography research side. So we have opportunities in all of these areas and these are coming to fruition now that we’ve had about 12 to 18 months to have an open dialogue with our customers and sit down and collaborate with them and new ideas are coming out and we are getting design wins. Secondly, as we mentioned on various calls we have had with our new approach to our customers with the new sales team, new business team, we are able to have a dialogue with a much broader base of customers and the various sections within our customer base. So all that is moving -- we expect to get more design wins from those and those design wins would provide a combination of either NRE. So basically licensed revenue and also they may have a license revenue as royalties in the future. So they are the growth areas in multiple -- there is growth potential in multiple areas.

Okay, great. Thanks. That’s it for me.

[Operator’s instructions] At this time, I see no other questions in queue. I will turn it back to Mr. Black for any closing remarks.

Thank you very much. Thank you all for your continued interest and support. We look forward to speaking with you again soon. Thank you.