Rimini Street(US:RMNI)2025-07-31 20:04markdown [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)