Rimini Street, Inc. (NASDAQ:RMNI) is one of the cheap AI stocks to buy right now. On September 17, the company announced that the Korean Broadcasting System had tapped it to provide support for its SAP ECC 6.0. Rimini Street, Inc. (RMNI) Tapped by Korean Broadcaster to Accelerate AI Vision Photo by John Schnobrich on Unsplash The strategic partnership will allow KBS to maintain its current SAP system rather than upgrade to S/4HANA. It will also reduce its annual software maintenance fees by 50%. The bro ...

Group 1: Momentum Investing Overview - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach [1] - Fast-moving trending stocks can be difficult to enter at the right time, and traditional momentum parameters may not always be reliable [2] Group 2: RMNI Stock Analysis - Rimini Street (RMNI) has shown a recent price momentum with a four-week price change of 3% [4] - RMNI has gained 22% over the past 12 weeks, indicating strong long-term momentum, with a beta of 1.34, suggesting it moves 34% more than the market [5] - RMNI has a Momentum Score of B, indicating a favorable time to invest [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investor interest [7] - RMNI is trading at a Price-to-Sales ratio of 0.89, suggesting it is undervalued at 89 cents for each dollar of sales [7] Group 3: Investment Opportunities - RMNI is highlighted as a strong candidate for investment, with potential for further price increases [8] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, providing more investment opportunities [8] - Zacks offers over 45 Premium Screens to help identify winning stock picks based on various investing styles [9]

Core Viewpoint - Rimini Street reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.09, and showing no growth compared to the previous year's earnings of $0.07 per share [1][2] Financial Performance - The company posted revenues of $104.11 million for the quarter ended June 2025, which was 1.98% below the Zacks Consensus Estimate, but an increase from $103.12 million year-over-year [2] - Over the last four quarters, Rimini Street has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Rimini Street shares have increased approximately 74.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.2% [3] Future Outlook - The company's earnings outlook will be crucial for determining future stock performance, with current consensus EPS estimates at $0.10 for the upcoming quarter and $0.38 for the current fiscal year [7] - The Zacks Rank for Rimini Street is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which Rimini Street belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $104.1 million, a year-over-year increase of 1% [20] - Annualized recurring revenue (ARR) was $394.1 million, a year-over-year decrease of 1.3% [21] - Gross margin for Q2 was 60.4%, compared to 59.1% in the prior year [22] - Net income for Q2 was $30.3 million or $0.32 per diluted share, compared to a net loss of $0.01 per diluted share in the prior year [24] - Adjusted EBITDA for Q2 was $13 million, or 12.4% of revenue, compared to 8.5% in the prior year [25] Business Line Data and Key Metrics Changes - Billings for Q2 were $110.6 million, down 0.9% year-over-year [21] - Excluding PeopleSoft, revenue increased by 3.6% compared to the prior year [21] - PeopleSoft revenue was approximately 6% of total revenue for Q2, down from 8% in the prior year [27] Market Data and Key Metrics Changes - Clients in the United States represented 47% of total revenue, while international clients represented 53% [20] - Deferred revenue as of June 30, 2025, was $262.9 million, compared to $262.8 million in the prior year [26] Company Strategy and Development Direction - The company has evolved from a single product company to offering a robust portfolio of technology solutions across three service pillars: support, optimize, and innovate [7][11] - The Rimini SmartPath model is being embraced by organizations to extend the lifespan of their ERP systems and drive better ROI [6] - The company plans to reinitiate guidance at its Analyst Day, expected to announce for the fourth quarter [19] Management's Comments on Operating Environment and Future Outlook - Management noted that instability in global markets is affecting all industries, creating opportunities for the company to help customers navigate these challenges [33][34] - The settlement with Oracle is expected to open new opportunities and improve sales cycles [31][32] - The company aims to achieve a "Rule of 40" target, striving for 20% growth on both top and bottom lines [44] Other Important Information - The company received approximately $37.9 million from Oracle related to litigation settlement recognized in Q2 [24] - The company has over 2,000 full-time professionals across 21 countries [11] - The company is focusing on expanding alliances and partnerships to enhance sales pipeline [12] Q&A Session Summary Question: How did litigation impact deal closures? - Management indicated that litigation was a blocker for some customers, affecting their willingness to proceed with transactions [31][32] Question: What is the outlook for federal and higher education spending? - Management noted that instability in global markets is affecting all industries, but this creates opportunities for the company [33][34] Question: Will litigation costs decrease next year? - Management expects litigation costs to decrease but acknowledged ongoing wind-down elements related to PeopleSoft [35][36] Question: What is the growth outlook for the second half of the year? - Management is committed to top-line growth and expects to see improvements in revenue retention and adjusted EBITDA [44][45] Question: What are the expectations for channel partnerships? - Management aims for partnerships to generate at least 10% of the sales pipeline, with potential for more [50][51] Question: What is the plan for returning capital to shareholders? - The company has authorized $12.5 million per year for buybacks, with a total of $50 million available [52][54] Question: How long will it take to evaluate improvements in bookings from Oracle Support? - Management indicated that it may take a few quarters to see the full impact of the settlement on bookings [58][59]

```markdown [Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Rimini Street reported a strong fiscal second quarter 2025, demonstrating improved profitability and client retention. Key highlights include an increase in gross margin, adjusted calculated billings, and adjusted EBITDA, alongside a higher revenue retention rate compared to the prior year | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Gross margin | 60.4% | 59.1% | +1.3 pp | | Adjusted Calculated Billings | $107.9M | $103.8M | +3.9% | | Adjusted EBITDA | $13.0M | $8.8M | +47.7% | | Revenue Retention Rate | 90% | 88% | +2 pp | [Select Second Quarter 2025 Financial Results](index=1&type=section&id=Select%20Second%20Quarter%202025%20Financial%20Results) The company achieved a modest revenue increase, driven by international growth, while U.S. revenue declined. Profitability significantly improved, with a shift from operating and net losses to substantial income, and a positive basic and diluted EPS. Cash and cash equivalents decreased year-over-year | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :--------------------------------- | :-------------------- | :-------------------- | :----------- | | Revenue | $104.1 | $103.1 | +1.0% | | U.S. revenue | $49.2 | $51.5 | -4.5% | | International revenue | $55.0 | $51.7 | +6.4% | | Subscription revenue | $98.5 (94.6% of total)| $99.9 (96.8% of total)| -1.4% | | Annualized Recurring Revenue | $394.1 | $399.4 | -1.3% | | Active Clients | 3,060 | 3,007 | +1.8% | | Revenue Retention Rate (TTM) | 90% | 88% | +2 pp | | Calculated Billings | $110.6 | $111.6 | -0.9% | | Adjusted Calculated Billings | $107.9 | $103.8 | +3.9% | | Gross margin | 60.4% | 59.1% | +1.3 pp | | Operating income (loss) | $41.2 | $(0.8) | N/A | | Non-GAAP Operating Income | $10.9 | $6.4 | +70.3% | | Net income (loss) | $30.3 | $(1.1) | N/A | | Non-GAAP Net loss (income) | $(0.1) | $6.1 | N/A | | Adjusted EBITDA | $13.0 | $8.8 | +47.7% | | Basic EPS | $0.33 | $(0.01) | N/A | | Diluted EPS | $0.32 | $(0.01) | N/A | | Cash and cash equivalents (period end)| $101.3 | $134.2 | -24.5% | [Recent Developments & Business Outlook](index=2&type=section&id=Recent%20Developments%20%26%20Business%20Outlook) [Subsequent Events](index=2&type=section&id=Subsequent%20Events) Following the quarter end, Rimini Street reached a confidential settlement agreement with Oracle Corporation, aiming to resolve a long-standing U.S. Federal Court case. The company also received a significant portion of previously paid attorneys' fees and reduced its outstanding debt - On July 7, 2025, the Company entered into a **confidential settlement agreement with Oracle Corporation** to allow for the final resolution and ultimate dismissal of U.S. Federal Court Case Number 2:14-cv-01699-MMD-DJA[5](index=5&type=chunk) - On July 9, 2025, Rimini Street **received approximately $37.9 million** of the approximately $58.7 million in attorneys' fees and costs previously paid to Oracle in late 2024[9](index=9&type=chunk) - On July 15, 2025, the company **repaid the remaining $10 million** outstanding of its revolving line of credit, reducing its indebtedness to **$71.3 million**[9](index=9&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Rimini Street plans to reinitiate its financial guidance during an upcoming Analyst Day, scheduled for the fourth quarter, with further details to be announced soon - The Company plans to **reinitiate guidance** at its **Analyst Day**, which is expected to be announced for the **fourth quarter**[6](index=6&type=chunk) [Operational Achievements and Partnerships](index=2&type=section&id=Operational%20Achievements%20and%20Partnerships) Rimini Street expanded its client base and service offerings through new partnerships and client agreements, demonstrating continued operational growth and commitment to client satisfaction. Key initiatives include extending support for major enterprise software and strategic appointments to leadership - Announced representative new clients or expanded agreements, including **OSG Corporation extending Oracle EBS support through 2029** and **University of Melbourne selecting Rimini Manage and Consult for Salesforce**[9](index=9&type=chunk) - Formed partnerships with **Merlin Cyber** to expand services to federal, state, and local government agencies, and with **Dayforce** to provide Rimini Manage for Dayforce's HR, time management, and payroll solution across 160 countries[9](index=9&type=chunk) - **Extended support for all SAP ECC 6.0 and S/4/HANA releases through 2040**, enabling clients to re-allocate IT budget savings to new technologies like enterprise AI[9](index=9&type=chunk) - Appointed **Vijay Kumar as EVP and Chief Operating Officer** and **Joe Locandro as EVP and Chief Information Officer**[9](index=9&type=chunk) - **Closed over 6,800 support cases** and delivered **over 4,000 tax, legal, and regulatory updates** to clients across 21 countries, achieving an average client satisfaction rating of **4.9 out of 5.0**[9](index=9&type=chunk) [Company Information & Disclosures](index=2&type=section&id=Company%20Information%20%26%20Disclosures) [Webcast and Conference Call Information](index=2&type=section&id=Webcast%20and%20Conference%20Call%20Information) Rimini Street will host a conference call and webcast on July 31, 2025, to discuss its second quarter 2025 results and provide an update on third quarter 2025 performance-to-date metrics - A live webcast and conference call will be held on **July 31, 2025**, at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss **Q2 2025 results** and select **Q3 2025 performance-to-date metrics**[7](index=7&type=chunk) [Company's Use of Non-GAAP Financial Measures](index=2&type=section&id=Company%27s%20Use%20of%20Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures to supplement GAAP results, providing additional insights into core operating performance and facilitating comparisons across periods and with other companies. These measures exclude specific items not considered indicative of day-to-day operations - Non-GAAP financial measures are used to **supplement GAAP information**, providing **additional insights into performance** and enabling **consistent comparisons** across reporting periods and with other companies[8](index=8&type=chunk)[24](index=24&type=chunk) - Management uses non-GAAP measures for **operating performance evaluation**, **budget preparation**, **resource allocation**, **strategy effectiveness**, and **board communications**[24](index=24&type=chunk) [About Rimini Street, Inc.](index=3&type=section&id=About%20Rimini%20Street%2C%20Inc.) Rimini Street is a global provider of end-to-end enterprise software support and innovation solutions, specializing in third-party support for Oracle, SAP, and VMware software. The company offers a comprehensive portfolio of services to optimize enterprise software and has a broad client base across various sectors - Rimini Street, Inc. is a **global provider of end-to-end enterprise software support and innovation solutions**, and the **leading third-party support provider for Oracle, SAP, and VMware software**[10](index=10&type=chunk) - The Company offers a **comprehensive portfolio of unified solutions** to run, manage, support, customize, configure, connect, protect, monitor, and optimize enterprise application, database, and technology software[10](index=10&type=chunk) - Rimini Street has signed **thousands of contracts** with **Fortune Global 100, Fortune 500, midmarket, public sector, and government organizations**[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future events, opportunities, and growth initiatives, which are subject to various risks and uncertainties. These include litigation, macroeconomic trends, competition, client retention, new product adoption, and the ability to achieve profitability and manage costs - Statements regarding future events, opportunities, global expansion, and growth initiatives are **forward-looking** and based on **current management expectations**[12](index=12&type=chunk) - Risks and uncertainties include **litigation (especially with Oracle)**, **changes in the business environment**, **macroeconomic trends**, **geopolitical tensions**, **foreign exchange rates**, **competition**, **client retention**, and the **adoption of new products and services**[12](index=12&type=chunk) - Other risks involve **workforce reductions**, **total addressable market estimates**, **sales cycle variability**, **management team changes**, **personnel attraction**, **stock price volatility**, **financing needs**, **cybersecurity threats**, **AI technology deficiencies**, and **regulatory compliance**[12](index=12&type=chunk)[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Rimini Street reported an increase in total assets and a significant reduction in stockholders' deficit compared to December 31, 2024. Current assets saw growth, primarily driven by prepaid expenses, while total liabilities decreased | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $101,284 | $88,792 | +$12,492 | | Accounts receivable, net | $101,640 | $130,784 | -$29,144 | | Prepaid expenses and other | $61,506 | $19,194 | +$42,312 | | Total current assets | $282,126 | $256,276 | +$25,850 | | Total assets | $397,497 | $369,063 | +$28,434 | | Deferred revenue, current | $241,376 | $257,983 | -$16,607 | | Total current liabilities | $306,795 | $324,592 | -$17,797 | | Long-term debt, net | $75,638 | $82,187 | -$6,549 | | Total liabilities | $426,532 | $438,508 | -$11,976 | | Total stockholders' deficit | $(29,035) | $(69,445) | +$40,410 | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, Rimini Street reported a significant turnaround in profitability, moving from a net loss to a substantial net income. This was primarily driven by a large litigation settlement recovery, which offset a slight increase in revenue and a decrease in cost of revenue | Income Statement Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Revenue | $104,114 | $103,123 | +1.0% | | Cost of revenue | $41,261 | $42,180 | -2.2% | | Gross profit | $62,853 | $60,943 | +3.1% | | Sales and marketing | $38,020 | $37,377 | +1.7% | | General and administrative | $16,845 | $19,531 | -13.7% | | Litigation settlement | $(36,196) | — | N/A | | Total operating expenses | $21,655 | $61,718 | -64.9% | | Operating income (loss) | $41,198 | $(775) | N/A | | Net income (loss) | $30,258 | $(1,148) | N/A | | Basic EPS | $0.33 | $(0.01) | N/A | | Diluted EPS | $0.32 | $(0.01) | N/A | [GAAP to Non-GAAP Reconciliations](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) The reconciliation of GAAP to non-GAAP measures highlights the impact of litigation costs and related recoveries, stock-based compensation, and reorganization costs. Non-GAAP operating income and Adjusted EBITDA showed significant year-over-year growth for Q2 2025, while non-GAAP net income shifted to a slight loss | Non-GAAP Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :----------------------------- | :------------------------------- | :------------------------------- | :----------- | | Non-GAAP operating income | $10,861 | $6,440 | +68.6% | | Non-GAAP net income (loss) | $(79) | $6,067 | N/A | | Adjusted EBITDA | $12,951 | $8,792 | +47.3% | | Calculated billings | $110,636 | $111,610 | -0.9% | | Adjusted calculated billings | $107,912 | $103,847 | +3.9% | | Non-GAAP Adjustments (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Litigation costs and related recoveries, net | $(33,932) | $1,602 | | Stock-based compensation expense | $2,873 | $2,405 | | Reorganization costs | $722 | $3,208 | [Explanation of Non-GAAP Measures and Key Metrics](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Measures%20and%20Key%20Metrics) [Purpose of Non-GAAP Measures](index=8&type=section&id=Purpose%20of%20Non-GAAP%20Measures) Rimini Street uses non-GAAP financial measures to offer investors a clearer view of its core operating performance by excluding items not indicative of day-to-day business. These measures aid in evaluating performance consistency, comparing results with peers, and informing internal management decisions - Non-GAAP measures provide **supplemental information to investors**, enabling **evaluation of results** in the same way management does[24](index=24&type=chunk) - These measures assist in **comparing performance across reporting periods** and **against other companies** by **excluding items not indicative of core operating performance**[24](index=24&type=chunk) - Management uses non-GAAP measures for **operating performance assessment**, **annual budgeting**, **resource allocation**, **strategy evaluation**, and **board communications**[24](index=24&type=chunk) [Definitions of Key Metrics](index=8&type=section&id=Definitions%20of%20Key%20Metrics) This section defines key operational and non-GAAP financial metrics used by Rimini Street, including various billing measures, client counts, revenue retention, and adjusted profitability metrics, along with the specific exclusions applied to GAAP figures - Calculated Billings represents the **change in deferred revenue** for the current period **plus revenue** for the current period[25](index=25&type=chunk) - Adjusted Calculated Billings **excludes calculated billings associated with PeopleSoft services**[26](index=26&type=chunk) - Active Client is a **distinct entity purchasing services for a specific product**, indicating **business growth and sales success**[27](index=27&type=chunk) - Annualized Recurring Revenue is **subscription revenue recognized during a fiscal quarter multiplied by four**, indicating **potential future revenue** from the existing client base[28](index=28&type=chunk) - Revenue Retention Rate measures **actual subscription revenue from existing clients over a 12-month period relative to Annualized Recurring Revenue** at the start of the period[29](index=29&type=chunk) - Non-GAAP Operating Income and Non-GAAP Net Income **exclude litigation costs and related recoveries, stock-based compensation expense, and reorganization costs**[30](index=30&type=chunk)[31](index=31&type=chunk)[34](index=34&type=chunk) - **EBITDA excludes interest expense, income taxes, and depreciation and amortization expense from net income (loss)**. **Adjusted EBITDA further excludes litigation costs and related recoveries, stock-based compensation expense, and reorganization costs**[35](index=35&type=chunk) [Contact Information](index=9&type=section&id=Contact%20Information) This section provides contact details for Rimini Street's Investor Relations and Media Relations departments - Investor Relations contact: **Dean Pohl, +1 925 523-7636, dpohl@riministreet.com**[36](index=36&type=chunk) - Media Relations contact: **Janet Ravin, +1 702 285-3532, pr@riministreet.com**[36](index=36&type=chunk) ```

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements and accompanying detailed notes [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $101,284 | $88,792 | | Total current assets | $282,126 | $256,276 | | Total assets | $397,497 | $369,063 | | Total current liabilities | $306,795 | $324,592 | | Total liabilities | $426,532 | $438,508 | | Total stockholders' deficit | $(29,035) | $(69,445) | - The company's total assets increased by **$28.4 million** from December 31, 2024, to June 30, 2025, while total liabilities decreased by **$11.9 million**, leading to a significant reduction in stockholders' deficit[9](index=9&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $104,114 | $103,123 | $208,318 | $209,868 | | Gross profit | $62,853 | $60,943 | $126,387 | $124,773 | | Operating income (loss) | $41,198 | $(775) | $50,559 | $2,587 | | Net income (loss) | $30,258 | $(1,148) | $33,608 | $169 | | Basic EPS | $0.33 | $(0.01) | $0.37 | $0.00 | | Diluted EPS | $0.32 | $(0.01) | $0.36 | $0.00 | - The company reported a significant turnaround in profitability, moving from a net loss of **$1.1 million** in Q2 2024 to a net income of **$30.3 million** in Q2 2025, primarily driven by a litigation settlement income[12](index=12&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Deficit](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) Condensed Consolidated Statements of Stockholders' Deficit Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Stockholders' Deficit, beginning of period | $(63,696) | $(36,312) | | Net income (loss) | $30,258 | $(1,148) | | Total Stockholders' Deficit, end of period | $(29,035) | $(36,119) | - The total stockholders' deficit improved significantly from **$(69.4) million** at the beginning of the six-month period to **$(29.0) million** by June 30, 2025, largely due to net income generation[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,937 | $17,345 | | Net cash provided by (used in) investing activities | $(2,661) | $7,798 | | Net cash provided by (used in) financing activities | $(7,057) | $1,074 | | Net change in cash, cash equivalents and restricted cash | $13,265 | $18,774 | | Cash, cash equivalents and restricted cash at end of period | $102,487 | $134,626 | - Operating cash flow decreased slightly year-over-year, while investing activities shifted from a net inflow to a net outflow, and financing activities resulted in a net cash outflow in 2025 compared to an inflow in 2024[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 — NATURE OF BUSINESS AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201%20%E2%80%94%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) - Rimini Street, Inc is a global provider of end-to-end enterprise software support, products, and services, offering a comprehensive portfolio of unified solutions for enterprise application, database, and technology software platforms[21](index=21&type=chunk) - The unaudited condensed consolidated financial statements are prepared in conformity with U.S GAAP and should be read in conjunction with the Company's 2024 Annual Report on Form 10-K[22](index=22&type=chunk) [NOTE 2 — LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202%20%E2%80%94%20LIQUIDITY%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - As of June 30, 2025, current liabilities exceeded current assets by **$24.7 million**, but the company believes its **$102.5 million** in cash, cash equivalents, and restricted cash, along with future operating cash flows, will be sufficient to meet anticipated needs for at least 12 months[24](index=24&type=chunk)[26](index=26&type=chunk) - The company's current liabilities include **$241.4 million** of deferred revenue, with fulfillment costs estimated at approximately **40%** of related deferred revenue for Q2 2025[24](index=24&type=chunk) - The company amended its credit facility in April 2024, converting a **$90 million** term loan into a new **$75 million** term loan and a **$35 million** revolving line of credit[25](index=25&type=chunk) [NOTE 3 - DEFERRED CONTRACT COSTS AND DEFERRED REVENUE](index=10&type=section&id=NOTE%203%20-%20DEFERRED%20CONTRACT%20COSTS%20AND%20DEFERRED%20REVENUE) Deferred Contract Costs Activity (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Deferred contract costs, beginning of period | $39,160 | $41,493 | | Capitalized commissions during the period | $7,024 | $5,739 | | Amortized deferred contract costs during the period | $(9,386) | $(9,925) | | Deferred contract costs, end of period | $36,798 | $37,307 | Deferred Revenue Activity (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Deferred revenue, beginning of period | $281,197 | $286,974 | | Billings, net | $190,066 | $185,687 | | Revenue recognized | $(208,318) | $(209,868) | | Deferred revenue, end of period | $262,945 | $262,793 | - Remaining performance obligations as of June 30, 2025, amounted to **$589.8 million**, with **$262.9 million** already billed and recorded as deferred revenue[33](index=33&type=chunk) [NOTE 4 — OTHER FINANCIAL INFORMATION](index=11&type=section&id=NOTE%204%20%E2%80%94%20OTHER%20FINANCIAL%20INFORMATION) Prepaid Expenses and Other Current Assets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Litigation settlement receivable | $37,867 | $0 | | Prepaid expenses and deposits | $17,250 | $11,942 | | Total prepaid expenses and other current assets | $61,506 | $19,194 | Other Accrued Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued sales and other taxes | $6,607 | $8,137 | | Accrued reorganization costs | $717 | $1,052 | | Total other accrued liabilities | $18,687 | $20,688 | - Accrued reorganization costs decreased significantly from **$2,935 thousand** in Q2 2024 to **$717 thousand** in Q2 2025, reflecting ongoing cost structure optimization[37](index=37&type=chunk) [NOTE 5 — DEBT](index=12&type=section&id=NOTE%205%20%E2%80%94%20DEBT) Debt Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Term Loan | $68,731 | $70,280 | | Revolving line of credit | $10,000 | $15,000 | | Long-term debt, net of current maturities | $75,638 | $82,187 | - The company refinanced its credit facility in April 2024, establishing a **$75.0 million** term loan and a **$35.0 million** revolving line of credit; as of July 15, 2025, the remaining **$10.0 million** on the revolving line of credit was repaid, increasing borrowing capacity to **$35.0 million**[38](index=38&type=chunk)[39](index=39&type=chunk)[47](index=47&type=chunk) - The effective interest rate for the Credit Facilities was **8.1%** for Q2 2025, down from **9.0%** in Q2 2024; the revolving line of credit had an average interest rate of **7.1%** for Q2 2025[46](index=46&type=chunk)[48](index=48&type=chunk) [NOTE 6 — COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS](index=13&type=section&id=NOTE%206%20%E2%80%94%20COMMON%20STOCK%20OFFERING%2C%20RESTRICTED%20STOCK%20UNITS%2C%20STOCK%20OPTIONS%20AND%20WARRANTS) - The Board of Directors authorized an increase of approximately **3.6 million** shares available for grant under the 2013 Equity Incentive Plan and approved the 2025 Long-Term Incentive Plan[53](index=53&type=chunk)[54](index=54&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of revenue | $490 | $460 | $1,014 | $975 | | Sales and marketing | $1,028 | $576 | $1,954 | $980 | | General and administrative | $1,355 | $1,369 | $2,607 | $3,008 | | Total | $2,873 | $2,405 | $5,575 | $4,963 | - As of June 30, 2025, unrecognized compensation expense for PSUs was **$1.9 million** (weighted-average period of ~2 years) and for RSUs was **$9.8 million** (weighted-average period of ~2.2 years)[60](index=60&type=chunk)[62](index=62&type=chunk) [NOTE 7 — INCOME TAXES](index=18&type=section&id=NOTE%207%20%E2%80%94%20INCOME%20TAXES) Effective Tax Rates | Period | Effective Tax Rate | | :--- | :--- | | Three Months Ended June 30, 2025 | 25.8% | | Three Months Ended June 30, 2024 | (49.9)% | | Six Months Ended June 30, 2025 | 30.6% | | Six Months Ended June 30, 2024 | 92.4% | - The effective tax rate for the three months ended June 30, 2025, was **25.8%**, a significant change from **(49.9)%** in the prior year, primarily due to an increase in income before income taxes[69](index=69&type=chunk) - The company is evaluating the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on U.S tax laws[70](index=70&type=chunk) [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=18&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) - The company's total minimum purchase obligations as of June 30, 2025, amounted to **$10.9 million**[71](index=71&type=chunk) - The company entered into a confidential settlement agreement with Oracle on July 7, 2025, to resolve the Rimini II litigation, which includes a requirement to wind down support for Oracle PeopleSoft software by July 31, 2028[80](index=80&type=chunk)[86](index=86&type=chunk) - As a result of District Court orders, the company recorded a litigation settlement receivable of approximately **$37.9 million** and recognized **$36.2 million** in litigation settlement income and **$1.7 million** in interest income for the three and six months ended June 30, 2025[81](index=81&type=chunk)[85](index=85&type=chunk) [NOTE 9 — RELATED PARTY TRANSACTIONS](index=21&type=section&id=NOTE%209%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) - An affiliate of Adams Street Partners (ASP), a member of the Company's Board of Directors, owned approximately **25.5%** of the Company's outstanding Common Stock as of June 30, 2025[90](index=90&type=chunk) [NOTE 10 —EARNINGS PER SHARE](index=21&type=section&id=NOTE%2010%20%E2%80%94EARNINGS%20PER%20SHARE) Earnings Per Share (EPS) (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $30,258 | $(1,148) | $33,608 | $169 | | Basic EPS | $0.33 | $(0.01) | $0.37 | $0.00 | | Diluted EPS | $0.32 | $(0.01) | $0.36 | $0.00 | | Weighted average shares outstanding (Basic) | 92,127 | 90,495 | 91,686 | 90,125 | | Weighted average shares outstanding (Diluted) | 94,120 | 90,495 | 93,752 | 90,822 | - Potential common stock equivalents totaling **12.6 million** for Q2 2025 and **13.8 million** for Q2 2024 were excluded from diluted EPS computation due to their anti-dilutive impact[93](index=93&type=chunk) [NOTE 11 — FINANCIAL INSTRUMENTS](index=22&type=section&id=NOTE%2011%20%E2%80%94%20FINANCIAL%20INSTRUMENTS) - The company uses an interest rate swap agreement with a notional value of **$40.0 million** to manage interest rate risk, with a fixed payer SOFR rate of **3.71%** and an initial floating SOFR rate of **5.32%**[98](index=98&type=chunk)[49](index=49&type=chunk) - The fair value of the interest rate swap agreement was estimated as a liability of **$0.5 million** as of June 30, 2025[99](index=99&type=chunk) Interest Rate Swap Impact on Interest Expense (in thousands) | Period | Interest Expense (Benefit) from Interest Rate Swap | | :--- | :--- | | Three Months Ended June 30, 2025 | $(62) | | Three Months Ended June 30, 2024 | $(194) | | Six Months Ended June 30, 2025 | $(124) | | Six Months Ended June 30, 2024 | $(435) | [NOTE 12 - LEASES](index=23&type=section&id=NOTE%2012%20-%20LEASES) Lease Expense (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease expense related to ROU assets and liabilities | $1,230 | $1,109 | $2,421 | $2,222 | | Other lease expense | $296 | $181 | $485 | $293 | | Total lease expense | $1,526 | $1,290 | $2,906 | $2,515 | Operating Lease Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets, noncurrent | $21,282 | $7,161 | | Operating lease liabilities, current | $4,281 | $3,967 | | Operating lease liabilities, noncurrent | $20,558 | $7,064 | | Total operating lease liabilities | $24,839 | $11,031 | - A new operating lease in India, effective June 1, 2025, increased operating lease ROU assets by **$15.0 million** and liabilities by **$15.1 million**[104](index=104&type=chunk) [NOTE 13 - SEGMENT AND GEOGRAPHIC INFORMATION](index=24&type=section&id=NOTE%2013%20-%20SEGMENT%20AND%20GEOGRAPHIC%20INFORMATION) - The company operates as a single operating segment, with performance assessed based on consolidated net income[107](index=107&type=chunk) Revenue by Geographic Region (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | United States of America | $49,163 | $51,454 | $99,258 | $105,262 | | International | $54,951 | $51,669 | $109,060 | $104,606 | | Total | $104,114 | $103,123 | $208,318 | $209,868 | - International revenue grew by **6%** for the three months ended June 30, 2025, while U.S revenue declined by **4%**; Japan represented **11.7%** of total revenue in Q2 2025, up from **9.7%** in Q2 2024[109](index=109&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial conditions, operational results, key metrics, and liquidity for the reported periods [CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS](index=27&type=section&id=CAUTIONARY%20NOTE%20ABOUT%20FORWARD-LOOKING%20STATEMENTS) - The report contains forward-looking statements regarding future financial position, business strategy, and operational objectives, which are subject to risks and uncertainties, including those related to the Oracle settlement, the PeopleSoft Wind Down, economic conditions, and competition[112](index=112&type=chunk)[113](index=113&type=chunk) - Readers are cautioned not to rely on forward-looking statements as predictions of future events, as actual results may differ materially due to various factors[114](index=114&type=chunk) [Overview](index=28&type=section&id=Overview) - Rimini Street, Inc is a global provider of end-to-end enterprise software support, products, and services, expanding its portfolio to include managed services for various software platforms and new solutions for security, interoperability, observability, and consulting[119](index=119&type=chunk)[121](index=121&type=chunk) - The company supports approximately **3,060 active clients** globally, including **70 Fortune 500** and **19 Fortune Global 100** companies, with subscription-based revenue forming a foundation for future results[126](index=126&type=chunk)[127](index=127&type=chunk) - The company announced a wind-down of Oracle PeopleSoft support services by July 31, 2028, which accounted for approximately **6%** of total revenue for the six months ended June 30, 2025[128](index=128&type=chunk)[129](index=129&type=chunk) [Key Business Metrics](index=32&type=section&id=Key%20Business%20Metrics) Key Business Metrics | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Active clients | 3,060 | 3,007 | | Unique clients | 1,553 | 1,532 | | Annualized recurring revenue | $394 million | $399 million | | Revenue retention rate (12 months) | 90% | 88% | | Gross profit margin (3 months) | 60.4% | 59.1% | - Active clients increased by **2%** and unique clients by **1.4%** year-over-year, indicating growth in client base and cross-sales[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Annualized recurring revenue declined by **$5 million**, reflecting a recent reduction in client retention not fully offset by new engagements, while the revenue retention rate improved to **90%** for the 12 months ended June 30, 2025[139](index=139&type=chunk)[141](index=141&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) [Comparison of Three Months Ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Q2 2025 vs. Q2 2024 Financial Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Variance Amount | Variance Percent | | :--- | :--- | :--- | :--- | :--- | | Revenue | $104,114 | $103,123 | $991 | 1.0% | | Cost of revenue | $41,261 | $42,180 | $(919) | (2.2)% | | Gross profit | $62,853 | $60,943 | $1,910 | 3.1% | | Sales and marketing | $38,020 | $37,377 | $643 | 1.7% | | General and administrative | $16,845 | $19,531 | $(2,686) | (13.8)% | | Reorganization costs | $722 | $3,208 | $(2,486) | (77.5)% | | Litigation costs and related recoveries, net | $(33,932) | $1,602 | $(35,534) | (2,218.1)% | | Operating income | $41,198 | $(775) | $41,973 | (5,415.9)% | | Net income | $30,258 | $(1,148) | $31,406 | (2,735.7)% | - Revenue increased by **1%** driven by a **2%** increase in unique clients, with international revenue growing by **6%** while U.S revenue declined by **4%**[145](index=145&type=chunk) - Gross profit margin improved by **130 basis points** to **60.4%** due to a **2%** decrease in cost of revenue against a **1%** increase in revenue[149](index=149&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=36&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) H1 2025 vs. H1 2024 Financial Performance (in thousands) | Metric | H1 2025 | H1 2024 | Variance Amount | Variance Percent | | :--- | :--- | :--- | :--- | :--- | | Revenue | $208,318 | $209,868 | $(1,550) | (0.7)% | | Cost of revenue | $81,931 | $85,095 | $(3,164) | (3.7)% | | Gross profit | $126,387 | $124,773 | $1,614 | 1.3% | | Sales and marketing | $72,275 | $76,518 | $(4,243) | (5.5)% | | General and administrative | $34,376 | $37,933 | $(3,557) | (9.4)% | | Reorganization costs | $1,184 | $3,208 | $(2,024) | (63.1)% | | Litigation costs and related recoveries, net | $(32,007) | $4,527 | $(36,534) | (807.0)% | | Operating income | $50,559 | $2,587 | $47,972 | 1,854.3% | | Net income | $33,608 | $169 | $33,439 | 19,786.4% | - Revenue declined by **1%** for the six months ended June 30, 2025, primarily due to attrition of some large client contracts, despite a **2%** increase in unique clients[162](index=162&type=chunk) - Gross profit margin improved by **120 basis points** to **60.7%** due to a **4%** decrease in cost of revenue, mainly from a **5%** reduction in average headcount[166](index=166&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had a working capital deficit of **$24.7 million** but **$102.5 million** in available cash, cash equivalents, and restricted cash[176](index=176&type=chunk) - The company's 2024 Credit Facility includes a **$75.0 million** term loan and a **$35.0 million** revolving line of credit, with **$25.0 million** net availability as of June 30, 2025, increasing to **$35.0 million** after a **$10.0 million** repayment in July 2025[177](index=177&type=chunk) Cash Flows Summary (in thousands) | Cash Flow Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating activities | $15,937 | $17,345 | | Investing activities | $(2,661) | $7,798 | | Financing activities | $(7,057) | $1,074 | [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) - The preparation of financial statements requires management to make judgments, assumptions, and estimates, including those for allowance for doubtful accounts, valuation of swap agreements, stock options, leases, deferred income taxes, and contingencies[27](index=27&type=chunk) - No material changes in critical accounting policies and estimates have occurred since the filing of the 2024 Form 10-K[197](index=197&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=Recent%20Accounting%20Pronouncements) - The company adopted ASU 2023-09, 'Income Taxes - Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024, which will result in additional disclosures but no impact on consolidated financial statements[30](index=30&type=chunk) - The company is assessing the impact of ASU 2024-03 and ASU 2025-01, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,' effective for annual periods beginning after December 15, 2026, which require additional expense disclosures[199](index=199&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to foreign currency exchange and interest rate risks are detailed along with management strategies [Foreign Currency Exchange Risk](index=41&type=section&id=Foreign%20Currency%20Exchange%20Risk) - Approximately **53%** of the company's revenue for Q2 2025 was generated from international business, exposing it to foreign currency risks, primarily in Euro, British Pound Sterling, Brazilian Real, Australian Dollar, Indian Rupee, and Japanese Yen[201](index=201&type=chunk) - A hypothetical **10%** change in foreign currency exchange rates would impact income before income taxes by **±$1.2 million** and cash flows by **±$3.5 million**[203](index=203&type=chunk) [Interest Rate Risk](index=43&type=section&id=Interest%20Rate%20Risk) - The company is exposed to interest rate risk due to variable interest rates on its **$71.3 million** outstanding term loan and **$10.0 million** revolving line of credit under the 2024 Credit Facility[205](index=205&type=chunk)[206](index=206&type=chunk) - A hypothetical adverse change of **100 basis points** in SOFR would increase annual interest expense by approximately **$0.8 million**[206](index=206&type=chunk) - The company uses an interest rate swap agreement to partially reduce interest rate volatility, but it does not cover all variable rate indebtedness[316](index=316&type=chunk) [ITEM 4. Controls and Procedures](index=43&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The effectiveness of disclosure controls and procedures is confirmed with no material changes to internal controls reported [Evaluation of Disclosure Controls and Procedures](index=43&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[209](index=209&type=chunk) - A control system provides only reasonable, not absolute, assurance against errors and fraud due to inherent limitations like resource constraints, human judgment, and potential for circumvention[208](index=208&type=chunk) [Changes in Internal Control over Financial Reporting](index=44&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[210](index=210&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=44&type=section&id=ITEM%201.%20Legal%20Proceedings) This section references legal proceedings from Note 8, focusing on the Oracle litigation and settlement - The legal proceedings, including the Oracle litigation, are detailed in Note 8 of the Unaudited Condensed Consolidated Financial Statements[212](index=212&type=chunk) - The company believes that the final outcome of ordinary course litigation matters will not have a material adverse effect on its business, despite potential costs and diversion of management resources[212](index=212&type=chunk) [ITEM 1A. Risk Factors](index=44&type=section&id=ITEM%201A.%20Risk%20Factors) Key factors that could impact business and financial results are outlined, including operational and governance risks - Key risks include potential breaches of the Oracle Settlement Agreement, challenges in completing the PeopleSoft Wind Down, ongoing Oracle litigation, economic uncertainties, intense competition, and the ability to attract and retain clients and personnel[216](index=216&type=chunk)[217](index=217&type=chunk) - Other significant risks involve indebtedness, stock price volatility, control by major stockholders, and the impact of corporate governance provisions[219](index=219&type=chunk)[226](index=226&type=chunk) [Risks Related to Our Business, Operations and Industry](index=44&type=section&id=Risks%20Related%20to%20Our%20Business%2C%20Operations%20and%20Industry) [Risks Relating to the Oracle Settlement Agreement](index=46&type=section&id=Risks%20Relating%20to%20the%20Oracle%20Settlement%20Agreement) - An uncured material breach of the July 7, 2025, Settlement Agreement with Oracle could lead to the lifting of the litigation stay and adverse outcomes in the Rimini II litigation, potentially resulting in significant financial penalties[221](index=221&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The company is required to complete the wind-down of Oracle PeopleSoft support services by July 31, 2028, which is expected to result in significant revenue reductions and potential costs, with uncertain timing and total impact[237](index=237&type=chunk)[239](index=239&type=chunk)[242](index=242&type=chunk) - Ongoing litigation with Oracle and the PeopleSoft Wind Down may continue to challenge business growth, client acquisition, and retention due to client concerns and negative communications from Oracle[244](index=244&type=chunk) [Other Risks Related to Our Business, Operations and Industry](index=50&type=section&id=Other%20Risks%20Related%20to%20Our%20Business%2C%20Operations%20and%20Industry) - Economic uncertainties, including rising inflation and interest rates, geopolitical conflicts, and trade turmoil, may increase operational costs, reduce demand for services, and negatively impact financial results[247](index=247&type=chunk) - The company faces significant competition from enterprise software vendors and other independent support providers, which could impede its ability to attract new clients, retain existing ones, and maintain pricing[248](index=248&type=chunk)[249](index=249&type=chunk) - Failure to attract and retain qualified personnel, especially sales staff, or to effectively manage growth and organizational changes, could harm business strategy execution and profitability[263](index=263&type=chunk)[264](index=264&type=chunk)[255](index=255&type=chunk) - Cybersecurity threats are increasing in frequency and sophistication; a compromise of data security measures or unauthorized access to client data could damage reputation, lead to client loss, and incur significant liabilities[285](index=285&type=chunk)[289](index=289&type=chunk) [Risks Related to our Indebtedness, Capitalization Matters and Corporate Governance](index=63&type=section&id=Risks%20Related%20to%20our%20Indebtedness%2C%20Capitalization%20Matters%20and%20Corporate%20Governance) [Risks Related to our Indebtedness and Securities](index=63&type=section&id=Risks%20Related%20to%20our%20Indebtedness%20and%20Securities) - The company's indebtedness, totaling **$80.3 million** as of June 30, 2025, may limit operational and financing flexibility, requiring significant cash flow for debt service and potentially restricting additional financing[311](index=311&type=chunk)[312](index=312&type=chunk) - The 2024 Credit Facility imposes operating and financial restrictions, including covenants on liens, asset sales, mergers, and debt, which could lead to default if not met[313](index=313&type=chunk)[315](index=315&type=chunk) - Variable rate indebtedness exposes the company to interest rate risk, and the transition to SOFR could increase debt service obligations, impacting net income and cash flows[316](index=316&type=chunk)[317](index=317&type=chunk) - The price of common stock may be volatile due to various factors, and future issuances of common stock or sales by large stockholders could dilute existing stockholders and depress market price[318](index=318&type=chunk)[320](index=320&type=chunk) [Risks Relating to our Corporate Governance](index=66&type=section&id=Risks%20Relating%20to%20our%20Corporate%20Governance) - Certain stockholders, including Adams Street Partners LLC (**25.5%**) and the CEO (**12.1%**), hold significant control, potentially limiting other stockholders' influence over key transactions and corporate actions[321](index=321&type=chunk)[322](index=322&type=chunk) - The company does not intend to pay dividends on its Common Stock, meaning returns on investment will depend on stock price appreciation, which is not guaranteed[323](index=323&type=chunk) - The stock repurchase program may affect stock price and volatility but can be suspended or terminated at any time, potentially decreasing the trading price[324](index=324&type=chunk) - Provisions in the DGCL and corporate documents, such as a classified Board and limitations on stockholder actions, could delay or discourage takeover attempts[326](index=326&type=chunk)[327](index=327&type=chunk) [General Risks](index=67&type=section&id=General%20Risks) - Future acquisitions, strategic investments, partnerships, or alliances could be difficult to integrate, divert management attention, disrupt business, dilute stockholder value, and adversely affect financial condition[332](index=332&type=chunk) - Changes in the commercial insurance market, including rising premium costs, higher deductibles, and lower coverage limits, may impact the company's ability to maintain adequate insurance at a reasonable cost[333](index=333&type=chunk) - Catastrophic events like online attacks, natural disasters, or geopolitical instability could disrupt business operations, cause system interruptions, and harm financial condition[335](index=335&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases were made during the three months ended June 30, 2025 - No repurchases of Common Stock occurred during the three months ended June 30, 2025[339](index=339&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=68&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - There were no defaults upon senior securities[340](index=340&type=chunk) [ITEM 4. Mine Safety Disclosures](index=68&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company[341](index=341&type=chunk) [ITEM 5. Other Information](index=68&type=section&id=ITEM%205.%20Other%20Information) Details on Rule 10b5-1 trading arrangements for vested equity awards are provided - The company's RSU and PSU agreements include provisions for automatic sale of shares to satisfy minimum statutory tax withholding obligations, which may constitute a 'non-Rule 10b5-1 trading arrangement'[343](index=343&type=chunk) - On June 2, 2025, CFO Michael L Perica entered into a Rule 10b5-1 trading arrangement to sell up to **205,377 shares** of common stock from vested RSUs and PSUs, with sales permitted from September 2, 2025, to August 28, 2026[344](index=344&type=chunk) [ITEM 6. Exhibits](index=70&type=section&id=ITEM%206.%20Exhibits) A list of all exhibits filed with the Form 10-Q is provided - Exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, the Settlement Agreement with Oracle Corporation, and certifications from the CEO and CFO[346](index=346&type=chunk) - The list also includes Inline XBRL Instance Document and Taxonomy Extension files for financial data[346](index=346&type=chunk) SIGNATURES - The report was signed on July 31, 2025, by Seth A Ravin, President, Chief Executive Officer and Chairman of the Board, and Michael L Perica, Executive Vice President and Chief Financial Officer[351](index=351&type=chunk)

Group 1 - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score [2] Group 2 - Rimini Street (RMNI) is highlighted as a strong candidate for investment, showing a four-week price change of 19.2% [3] - RMNI has gained 10.3% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.31, suggesting it moves 31% more than the market in either direction, reflecting fast-paced momentum [4] Group 3 - RMNI has a Momentum Score of B, indicating a favorable time to invest based on its momentum characteristics [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - RMNI is trading at a Price-to-Sales ratio of 0.83, suggesting it is undervalued at 83 cents for each dollar of sales [6] Group 4 - RMNI appears to have significant potential for growth at a fast pace, alongside other stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria [7] - There are over 45 Zacks Premium Screens available to assist in identifying winning stock picks based on various investing styles [8]

Core Insights - The article emphasizes the importance of identifying investment opportunities where intrinsic value diverges from market price, particularly focusing on undervalued companies [1]. Company Focus - The analysis highlights a specialized interest in Real Estate Investment Trusts (REITs), suggesting that this sector offers significant opportunities for investors due to its unique dynamics and potential for long-term growth [1]. - The investment approach is grounded in fundamental analysis, prioritizing factors such as financial health, competitive positioning, and management quality to ensure sustainable returns [1].

Group 1 - Rimini Street, Inc. (NASDAQ: RMNI) is a niche player in the enterprise software market, currently involved in legal disputes with Oracle [1] - The company focuses on providing third-party support for enterprise software, which is a significant aspect of its business model [1] - The article emphasizes the potential growth opportunities for Rimini Street amidst its legal challenges, suggesting that the market may not fully recognize its value [1] Group 2 - The author has a strong background in financial modeling and valuation, indicating a thorough analytical approach to evaluating companies like Rimini Street [1] - The focus remains on long-term investing, particularly in sectors such as technology, infrastructure, and internet services, which aligns with Rimini Street's market positioning [1]

Financial Data and Key Metrics Changes - The company has seen a significant uptick in inbound inquiries due to economic pressures, indicating a compelling value proposition for cost savings [8][9] - The decision to wind down the PeopleSoft business, which accounted for 7% of revenue, was made to focus on larger platforms and opportunities [20][23] Business Line Data and Key Metrics Changes - The company is expanding its offerings beyond traditional ERP support to include managed services and professional services, responding to client demand [3][4] - The partnership with ServiceNow is expected to enhance the company's service offerings, allowing clients to modernize their systems without needing to upgrade their existing ERP platforms [27][30] Market Data and Key Metrics Changes - The company is experiencing increased interest in its services as clients seek to manage costs and optimize their existing systems amid economic uncertainty [8][9] - The upcoming end-of-life for SAP ECC in 2027 is driving conversations and opportunities for the company, as clients seek alternatives to forced upgrades [14][15] Company Strategy and Development Direction - The company is shifting towards developing an indirect sales channel through partnerships, which is expected to enhance brand awareness and market reach [11][12] - The focus is on providing clients with options that allow them to retain their existing systems while accessing next-generation technologies [19][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current economic uncertainty as a "new norm," which has led to increased interest in cost-saving measures [9] - The company is optimistic about the next three to five years, anticipating significant market opportunities as clients look for innovative solutions [68] Other Important Information - The company emphasizes the importance of retaining perpetual licenses when transitioning to SaaS platforms, highlighting the value of existing assets [51][59] - The partnership with ServiceNow is seen as a strategic move to provide clients with a comprehensive modernization solution without the need for costly upgrades [36][38] Q&A Session Summary Question: How should investors think about the opportunity as SAP approaches its end-of-life? - Management noted that conversations around SAP have increased significantly, emphasizing the need for clients to have a strategy in place before 2027 [14][15] Question: What is the timeline for revenue generation from the ServiceNow partnership? - Management indicated that meaningful revenue from the ServiceNow partnership is expected next year, but it will take time to fully develop [40] Question: Why are system integrators (SIs) reaching out to the company now? - SIs are contacting the company because clients are looking for solutions to implement enterprise-wide AI without the constraints of vendor-specific platforms [48]