Rimini Street(RMNI) - 2024 Q3 - Quarterly Results

Revenue Performance - Revenue for Q3 2024 was $104.7 million, a decrease of 2.6$107.5 million in Q3 2023[2] - U.S. revenue decreased by 7.4% to $51.6 million, while international revenue increased by 2.7$53.1 million[2] - Subscription revenue accounted for 95.9% of total revenue at $100.4 million, down from 96.9$104.1 million in the prior year[2] - Revenue for Q3 2024 was $104.672 million, a decrease of 2.3$107.453 million in Q3 2023[13] Client Metrics - Active Clients as of September 30, 2024, were 3,097, a slight decrease of 0.1% from 3,099 clients a year earlier[2] - Active Clients are defined as distinct entities purchasing services, indicating business growth and sales success[18] Financial Losses - Operating loss for Q3 2024 was $49.6 million, compared to an operating income of$11.2 million in Q3 2023[2] - Net loss for Q3 2024 was $43.1 million, compared to net income of$6.8 million in the same period last year[2] - Net loss for Q3 2024 was $43.100 million, compared to a net income of$6.801 million in Q3 2023[13] Revenue Retention and Recurring Revenue - Annualized Recurring Revenue was $401.5 million, a decrease of 3.6$416.3 million in Q3 2023[2] - Revenue Retention Rate dropped to 89% from 94% in the previous year[2] - Revenue Retention Rate measures subscription revenue from existing clients over a 12-month period, providing insight into client retention[20] - Annualized Recurring Revenue is calculated by multiplying quarterly subscription revenue by four, indicating potential revenue for the next 12 months[19] Operating Expenses and Profitability - Total operating expenses increased significantly to $113.131 million in Q3 2024, compared to$56.104 million in Q3 2023[13] - Gross profit for Q3 2024 was $63.537 million, down from$67.343 million in Q3 2023, reflecting a gross margin of 60.7%[13] - Non-GAAP operating income for Q3 2024 was $13.402 million, down from$16.497 million in Q3 2023[14] - Adjusted EBITDA for Q3 2024 was $13.677 million, compared to$18.239 million in Q3 2023[14] Cost Management and Reorganization - The company incurred reorganization costs of $1.4 million in Q3 2024 as part of its cost optimization efforts[2] - Reorganization costs primarily consist of severance costs related to the company's restructuring efforts[24] Litigation Costs - The company reported a significant increase in litigation costs, totaling$59.391 million in Q3 2024, compared to $2.127 million in Q3 2023[13] Cash and Liabilities - Cash and cash equivalents increased to$119.494 million as of September 30, 2024, from $115.424 million at the end of 2023[12] - Total current liabilities decreased to$322.468 million from $336.434 million at the end of 2023[12] - Deferred revenue, current and noncurrent, at the end of Q3 2024 was$223.314 million, down from $238.399 million at the end of Q3 2023[14] Non-GAAP Financial Measures - Rimini Street reported key non-GAAP financial measures including non-GAAP operating income, non-GAAP net income, EBITDA, Adjusted EBITDA, and Billings[15] - Non-GAAP Operating Income excludes litigation costs, stock-based compensation, and reorganization costs, reflecting core operational performance[21] - Adjusted EBITDA excludes litigation costs, stock-based compensation, and reorganization costs, providing a clearer view of operational profitability[24] - The company emphasizes the importance of non-GAAP measures for consistent performance evaluation across reporting periods[16] Billings and Cash Flow - Billings represent the change in deferred revenue plus current period revenue, indicating cash flow dynamics[17] Compensation Strategy - The company’s compensation strategy includes stock-based compensation to align employee interests with shareholders[23]