Rimini Street(RMNI)

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Rimini Street(RMNI) - 2021 Q1 - Earnings Call Transcript
2021-05-11 07:14
Financial Data and Key Metrics Changes - The company achieved record revenue of $87.9 million, up 12.6% year-over-year [5][21] - Annualized recurring revenue increased to $349 million, a year-over-year increase of 13% [21] - Billings for the first quarter were $81 million, a year-over-year increase of 24.2% [23] - Gross margin was 61.5% for the first quarter compared to 61.3% for the prior year [23] - Operating cash flow for the first quarter was $24.5 million compared to $26.3 million for the prior year [25] - The company ended the first quarter with a record cash balance of $153 million compared to $58 million a year ago [28] Business Line Data and Key Metrics Changes - The active client count reached 2,550, up 22.8% year-over-year [5] - The revenue retention rate for support service subscriptions remained above 90% [21] - The company closed more than 10,000 support cases and delivered nearly 32,000 tax, legal, and regulatory updates across 36 countries [6] Market Data and Key Metrics Changes - Clients within the United States represented 54% of total revenue, while international clients contributed 46%, with international clients showing a year-over-year revenue growth rate of 32% [21] - The Asia-Pacific region led international strength with significant growth [21] Company Strategy and Development Direction - The company aims to achieve $1 billion in annual revenue by 2026 [5][19] - There is a strategic focus on increasing cross-sell opportunities within the client base, estimated to exceed $1 billion in annual revenue [14] - The company is investing in new products and services, including application management services and advanced security solutions [23] Management's Comments on Operating Environment and Future Outlook - The pandemic continues to create both opportunities and challenges, with the company believing its strong balance sheet will provide flexibility [7][8] - Management noted stabilization in client retention despite some ongoing COVID-related challenges [41] - The company expects growth to accelerate in North America due to a restructured regional operating model and new sales leadership [22][59] Other Important Information - The company has signed over 4,000 clients since its inception, saving clients more than $5 billion [6] - The litigation with Oracle is ongoing, with the company confident in its legal position regarding third-party support [16][18] Q&A Session Summary Question: Update on sales rep counts and go-to-market strategy - The company ended the quarter with 81 sales reps, above target, and aims to reach 100 by the end of 2021 [36] Question: Pipeline growth and AMS performance - The company reported a 60% increase in AMS invoicing in the first quarter compared to the previous year [37] Question: Client retention and COVID impact - Management acknowledged some COVID impact on retention but noted overall strong renewal numbers [41] Question: Billings growth and revenue guidance - The company experienced a 24% growth in billings, indicating a positive trend for the year [45][49] Question: North American growth rate expectations - Management believes North America can achieve double-digit growth, similar to international performance [59] Question: FX exposure - The company reported minimal FX exposure despite strong international growth [53] Question: Success factors in the Asia-Pacific region - The company attributes its success in APAC to local leadership and tailored solutions [68] Question: Competitor responses from Oracle and SAP - Management noted aggressive competition from Oracle and SAP, including discounting strategies, but emphasized the company's competitive advantages [69]
Rimini Street(RMNI) - 2021 Q1 - Quarterly Report
2021-05-10 20:18
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number: 001-37397 Rimini Street, Inc. (Exact name of registrant as specified in its charter) Large accelerated filer ¨ Accelerated filer þ Non ...
Rimini Street(RMNI) - 2020 Q4 - Earnings Call Transcript
2021-03-04 01:52
Rimini Street, Inc. (NASDAQ:RMNI) Q4 2020 Earnings Conference Call March 3, 2021 5:00 PM ET Company Participants Dean Pohl - VP, IR Seth Ravin - CEO Michael Perica - CFO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Richard Baldry - ROTH Capital Jeff Van Rhee - Craig-Hallum Nick Altmann - Cowen Mark Schappel - Benchmark Operator Welcome to the Rimini Street Earnings Call. My name is Karen. I will be your operator for today's call [Operator Instructions]. I will now turn the call ...
Rimini Street(RMNI) - 2020 Q4 - Annual Report
2021-03-03 21:17
Part I [Business](index=6&type=section&id=Item%201.%20Business) Rimini Street, Inc. is a global provider of third-party enterprise software support services, primarily for Oracle and SAP products Key Financial Performance (2018-2020, in millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Revenue** | $326.8M | $281.1M | $253.5M | | **Revenue Growth (YoY)** | 16% | 11% | - | | **Net Income (Loss)** | $13.0M | $17.5M | ($64.0M) | | **International Revenue %** | 41% | 36% | 35% | - The company is a leading independent software support provider for Oracle and SAP products, disrupting the traditional vendor support model by offering innovative, value-driven services[20](index=20&type=chunk) - Rimini Street has expanded its service portfolio to include Application Management Services (AMS) for Oracle and SAP, as well as support for SaaS solutions like Salesforce products, aiming to provide integrated management and support from a single vendor[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - As of December 31, 2020, the company supported **over 2,480 active clients** globally, including **75 Fortune 500** and **17 Fortune Global 100** companies, with approximately 1,420 employees[26](index=26&type=chunk) - The company's pricing model for base software support is typically **50%** of the annual fees charged by the software vendor, offering significant cost savings to clients[36](index=36&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from ongoing Oracle litigation, an undeveloped market, intense competition, and capital structure obligations - The company is involved in ongoing litigation with Oracle (`Rimini I` and `Rimini II`); an adverse outcome could result in substantial damages and/or an injunction against certain business practices, materially harming the business, with Oracle also filing a motion contending contempt of a prior injunction[114](index=114&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk) - A significant portion of revenue (**approximately 64%** for FY 2020) is derived from support services for Oracle products subject to ongoing litigation, posing a substantial risk if service delivery must be altered[126](index=126&type=chunk) - The COVID-19 pandemic presents risks including potential delays in prospective clients' decisions, impaired ability of current clients to make timely payments, and reduced client renewal rates, which could adversely affect revenue[134](index=134&type=chunk)[135](index=135&type=chunk) - The market for independent software support is relatively undeveloped and may not grow, with the company's success depending on convincing enterprises to switch from vendor-provided support[136](index=136&type=chunk) - The company faces intense competition from enterprise software vendors (Oracle, SAP) who possess greater resources, brand recognition, and may offer discounts or change terms to retain support customers[141](index=141&type=chunk)[143](index=143&type=chunk) - The Series A Preferred Stock and related Convertible Notes impose restrictions on incurring debt and contain obligations that limit operational flexibility, with a mandatory redemption event potentially triggered by adverse litigation outcomes impacting liquidity[206](index=206&type=chunk)[232](index=232&type=chunk) [Unresolved Staff Comments](index=50&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[243](index=243&type=chunk) [Properties](index=50&type=section&id=Item%202.%20Properties) The company leases all its global facilities, with principal executive offices in Las Vegas, Nevada, and numerous other offices worldwide - The company's main offices are in Las Vegas, Nevada, with additional leased offices in various global locations including California, Hong Kong, London, Sydney, São Paulo, and Tokyo[244](index=244&type=chunk) - All facilities are leased; the company does not own any real property[245](index=245&type=chunk) [Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) Details regarding legal proceedings, primarily the Oracle litigation, are incorporated by reference from Note 10 of the financial statements - Details regarding legal proceedings, primarily the litigation with Oracle, are incorporated by reference from Note 10 of the financial statements[246](index=246&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[248](index=248&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, pays dividends on preferred stock, but not on common stock, and provides a stock performance graph - The company's common stock is traded on the Nasdaq Global Market under the symbol 'RMNI'[251](index=251&type=chunk) - The company pays a **10.0%** cash dividend and a **3.0%** payment-in-kind (PIK) dividend annually on its Series A Preferred Stock, with no dividends paid or expected on common stock in the foreseeable future[252](index=252&type=chunk)[253](index=253&type=chunk) Stock Performance Comparison (Cumulative Total Return) | Date | Rimini Street, Inc. | Nasdaq Composite Index | Dow Jones U.S. Computer Services Index | | :--- | :--- | :--- | :--- | | 10/11/2017 | $100.00 | $100.00 | $100.00 | | 12/31/2017 | $81.31 | $103.81 | $101.53 | | 12/31/2018 | $52.59 | $99.48 | $87.21 | | 12/31/2019 | $39.37 | $134.88 | $107.64 | | 12/31/2020 | $45.10 | $194.17 | $120.27 | [Selected Financial Data](index=52&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key historical financial data, including balance sheet, operations, and cash flow information Five-Year Selected Financial Data (in thousands) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $326,780 | $281,052 | $253,460 | $214,860 | $160,175 | | **Gross Profit** | $200,569 | $175,946 | $157,479 | $131,962 | $93,130 | | **Operating Income** | $17,884 | $22,136 | $29,524 | $25,274 | $13,931 | | **Net Income (Loss)** | $12,980 | $17,529 | $(63,951) | $(50,024) | $(12,937) | | **Total Assets** | $279,935 | $201,220 | $146,523 | $145,781 | $99,378 | | **Total Liabilities** | $343,019 | $292,497 | $257,923 | $319,910 | $312,888 | | **Stockholders' Deficit** | $(200,938) | $(222,593) | $(225,398) | $(174,127) | $(213,510) | | **Net Cash from Ops** | $42,103 | $20,386 | $22,382 | $29,163 | $(59,609) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) Management discusses a 16.3% revenue increase in 2020, a slight gross margin decrease, rising operating expenses, and strong operating cash flow Comparison of Operations: 2020 vs. 2019 (in thousands) | Line Item | 2020 | 2019 | Variance ($) | Variance (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $326,780 | $281,052 | $45,728 | 16.3% | | **Gross Profit** | $200,569 | $175,946 | $24,623 | 14.0% | | **Gross Margin** | 61.4% | 62.6% | - | - | | **Total Operating Expenses** | $182,685 | $153,810 | $28,875 | 18.8% | | **Operating Income** | $17,884 | $22,136 | ($4,252) | (19.2)% | | **Net Income** | $12,980 | $17,529 | ($4,549) | (26.0)% | Key Business Metrics (2018-2020) | Metric | As of Dec 31, 2020 | As of Dec 31, 2019 | As of Dec 31, 2018 | | :--- | :--- | :--- | :--- | | **Active Clients** | >2,480 | >2,060 | >1,800 | | **Annualized Subscription Revenue** | ~$349M | ~$302M | ~$271M | | **Revenue Retention Rate** | 92% | 92% | 91% | - The COVID-19 pandemic had no significant net impact on 2020 results, with cost savings from reduced travel and marketing events partially offset by special employee bonuses, and the company deferred **$3.3 million** in payroll tax payments under the CARES Act[277](index=277&type=chunk)[278](index=278&type=chunk)[281](index=281&type=chunk) - The company's business model relies on multi-year subscription contracts, generally with an initial non-cancelable period of two to three years, with fees typically invoiced annually in advance, providing strong revenue visibility[289](index=289&type=chunk)[290](index=290&type=chunk) - Cash flow from operations was **$42.1 million** in 2020, a significant increase from **$20.4 million** in 2019, primarily driven by net income adjusted for non-cash expenses and a favorable change in operating assets and liabilities, including a **$22.7 million** increase in deferred revenue[374](index=374&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is foreign currency exchange, impacting 41% of 2020 revenue, though a 10% change is not deemed material - The company is exposed to foreign currency exchange risk as international revenue accounted for **41%** of total revenue in 2020, with key currencies including the Euro, British Pound Sterling, Brazilian Real, Australian Dollar, Indian Rupee, and Japanese Yen[412](index=412&type=chunk) - A hypothetical **10%** change in foreign currency exchange rates would not have had a material impact on the consolidated financial statements for the periods presented[413](index=413&type=chunk) - The company does not have material exposure to interest rate risk as it holds cash for working capital and does not engage in significant investment activities, and inflation risk is also considered immaterial[414](index=414&type=chunk)[415](index=415&type=chunk) [Financial Statements and Supplementary Data](index=78&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2018-2020, including the auditor's report and detailed notes Consolidated Balance Sheet Data (as of Dec 31, in thousands) | Account | 2020 | 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $87,575 | $37,952 | | Accounts receivable, net | $117,937 | $111,574 | | **Total Assets** | **$279,935** | **$201,220** | | Deferred revenue (current) | $228,967 | $205,771 | | **Total Liabilities** | **$343,019** | **$292,497** | | Redeemable Series A Preferred Stock | $137,854 | $131,316 | | **Total Stockholders' Deficit** | **($200,938)** | **($222,593)** | Consolidated Statement of Operations Data (Year ended Dec 31, in thousands) | Account | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Revenue** | $326,780 | $281,052 | $253,460 | | **Gross Profit** | $200,569 | $175,946 | $157,479 | | **Operating Income** | $17,884 | $22,136 | $29,524 | | **Net Income (Loss)** | $12,980 | $17,529 | ($63,951) | - The independent auditor's report from KPMG LLP identified two critical audit matters: the evaluation of revenue contracts with non-standard provisions and the assessment of contingencies related to the Rimini II litigation with Oracle[429](index=429&type=chunk)[430](index=430&type=chunk)[433](index=433&type=chunk) - Note 10 details the ongoing litigation with Oracle, where a court found infringement on certain Oracle copyrights in September 2020, but damages have not yet been determined, and the company believes an award for damages is not probable and has not accrued a loss[644](index=644&type=chunk)[645](index=645&type=chunk)[649](index=649&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=123&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting or financial disclosure matters - None[676](index=676&type=chunk) [Controls and Procedures](index=123&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[679](index=679&type=chunk) - Based on an evaluation against the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[682](index=682&type=chunk) [Other Information](index=124&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[685](index=685&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=124&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 Proxy Statement [Executive Compensation](index=124&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2021 Proxy Statement [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners, management, and related matters is incorporated by reference from the 2021 Proxy Statement [Certain Relationships and Related Transactions, and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2021 Proxy Statement [Principal Accounting Fees and Services](index=124&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2021 Proxy Statement Part IV [Exhibits and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements from Item 8 and provides a detailed index of all exhibits filed or incorporated by reference [Form 10-K Summary](index=128&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[703](index=703&type=chunk)
Rimini Street(RMNI) - 2020 Q3 - Earnings Call Transcript
2020-11-08 12:24
Rimini Street, Inc. (NASDAQ:RMNI) Q3 2020 Earnings Conference Call November 5, 2020 5:00 PM ET Company Participants Dean Pohl - Vice President, Investor Relations Seth Ravin - Chief Executive Officer Michael Perica - Chief Financial Officer Conference Call Participants Richard Baldry - ROTH Capital Derrick Wood - Cowen Operator Welcome to the Rimini Street Third Quarter 2020 Earnings Conference Call. My name is Anna, and I will be your operator for today's call. At this time, all participants are in a liste ...
Rimini Street(RMNI) - 2020 Q2 - Earnings Call Transcript
2020-08-07 11:26
Financial Data and Key Metrics Changes - The company achieved record quarterly revenue of $78.4 million, a year-over-year increase of 12.2% [9][40] - Net income for the second quarter was $3.5 million, compared to $6.1 million in the prior year [50] - Non-GAAP net income was $8.1 million for the second quarter 2020, up from $7.3 million in the prior year [50] - Total cash at quarter end was $73 million, a 45% increase compared to $50.3 million for the prior year [52] - Deferred revenue as of June 30, 2020, was approximately $218.5 million, up 6.7% from $204.8 million a year ago [52] Business Line Data and Key Metrics Changes - The revenue retention rate for subscriptions remained above 90%, with more than 70% of subscription revenue being non-cancelable for at least 12 months [9] - The company completed 160 geographically diverse sales transactions during the second quarter [17] - The annualized subscription revenue for the second quarter was $311 million, a year-over-year increase of 12% [40] Market Data and Key Metrics Changes - Clients within the United States comprised 61% of total revenue, while international clients contributed 39%, with international growth led by operations in Asia Pacific [41] - The company reported a year-over-year revenue growth rate of 30.4% for international clients [41] Company Strategy and Development Direction - The company is focusing on improving free cash flow and growing GAAP profitability while adapting to the pandemic's challenges [11][38] - Investments have been accelerated to meet increasing global demand for the expanded product and service portfolio due to the pandemic [12] - The company is expanding its Application Management Services (AMS) offerings, which are expected to create a unique value proposition for clients [28][91] Management's Comments on Operating Environment and Future Outlook - Management believes the opportunities created by the pandemic outweigh the risks, with a strong balance sheet providing business flexibility [14] - The company expects to see significant demand for its services as organizations look to cut IT operating costs [12][66] - Management noted that execution challenges exist globally due to the pandemic, affecting deal closures [66] Other Important Information - The company announced the development of new artificial intelligence software to improve client case resolution times by 23% [24] - The company is seeing growing interest in its Advanced Database Security and Advanced Middleware solutions [29] Q&A Session Summary Question: What caused the deceleration in deferred revenue growth? - Management indicated that the pandemic caused disruptions, leading to delays in deal closures, but noted record invoicing for customers paying in advance [57][60] Question: Is the pipeline for the second half of the year expected to be back-end loaded? - Management confirmed that the pipeline is among the largest ever seen, with government deals also contributing to growth [63][64] Question: What is the status of the application management service offerings? - Management stated that AMS is a growing revenue stream, with clients satisfied with the service, but emphasized a cautious approach to scaling [91] Question: Are there any pricing concessions for struggling customers? - Management explained that while some concessions were made, they are careful not to set low pricing benchmarks for the future [99][100] Question: Is there increased discounting from competitors like SAP and Oracle? - Management confirmed that competitors are offering more aggressive discounts to retain customers, but emphasized the superior value of their offerings [104][106] Question: What are the expectations for margin expansion going forward? - Management provided guidance on reducing sales and marketing expenses while aiming for long-term margin improvements [109][112]
Rimini Street (RMNI) Investor Presentation - Slideshow
2020-05-21 17:29
Rimini Streeť Engineered for Support Investor Presentation May 2020 Property of Rimini Street © 2020 1 Legal Notice "© 2020 Rimini Street, Inc. All rights reserved. "Rimini Street" is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rim ...
Rimini Street(RMNI) - 2020 Q1 - Earnings Call Transcript
2020-05-13 15:13
Rimini Street, Inc. (NASDAQ:RMNI) Q1 2020 Earnings Conference Call May 7, 2020 5:00 PM ET Company Participants Dean Pohl - Vice President, Investor Relations Seth Ravin - Chief Executive Officer Stanley Mbugua - Chief Accounting Officer Conference Call Participants Nick Altmann - Cowen Brian Kinstlinger - Alliance Global Partners Operator Ladies and gentlemen, thank you for standing by, and welcome to the Rimini Street First Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a ...
Rimini Street(RMNI) - 2020 Q1 - Earnings Call Presentation
2020-05-11 19:27
Rimini Streeť Engineered for Support Investor Presentation May 2019 Property of Rimini Street © 2020 1 Legal Notice "© 2020 Rimini Street, Inc. All rights reserved. "Rimini Street" is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rim ...
Rimini Street(RMNI) - 2019 Q4 - Annual Report
2020-03-16 20:06
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2019 For the Transition Period from to Commission File Number 001-37397 Rimini Street, Inc. (Exact name of registrant as specified in its charter) Delaware 36-4880301 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3993 Howard Hughes Parkway ...