Rimini Street(US:RMNI)2025-10-30 20:02Revenue Performance - For the three months ended September 30, 2025, the company generated revenue of $103.4 million, a decrease of 1% compared to $104.7 million in the same period of 2024[128]. - Approximately 45% of the company's revenue for the three months ended September 30, 2025, was generated in the United States, while 55% was generated in foreign jurisdictions[128]. - Revenue related to services for Oracle PeopleSoft products accounted for approximately 6% of total revenue for the nine months ended September 30, 2025, down from 8% for the same period in 2024[130]. - Total revenue for Q3 2025 was $103.4 million, down from $104.7 million in Q3 2024, a decrease of 1.2%[146]. - Revenue decreased from $314.5 million for the nine months ended September 30, 2024 to $311.7 million for the nine months ended September 30, 2025, a decline of $2.8 million or 1%[161]. - Subscription revenue for Q3 2025 was $98 million, accounting for 95% of total revenue, compared to $100 million or 96% in Q3 2024[139]. - Annualized recurring revenue decreased from $402 million in 2024 to $391 million in 2025, reflecting a decline of 2.7%[140]. - The Wind Down process for Oracle PeopleSoft services is expected to significantly reduce revenue, although the pace of reduction is currently unknown[130]. Client Metrics - The company employed over 2,000 professionals and supported over 3,150 active clients globally, including 81 Fortune 500 companies and 21 Fortune Global 100 companies[127]. - Active clients increased from approximately 3,097 in 2024 to 3,155 in 2025, representing a growth of 1.9%[136]. - Unique clients rose from approximately 1,577 in 2024 to 1,590 in 2025, indicating a growth of 0.8%[137]. - The company has experienced clients not renewing services due to global economic uncertainty and inflationary pressures[132]. Financial Position - The company has an accumulated deficit of $202.1 million as of September 30, 2025[128]. - The company had a working capital deficit of $41.4 million and an accumulated deficit of $202.1 million as of September 30, 2025[175]. - As of September 30, 2025, the company had available cash, cash equivalents, and restricted cash of $109.9 million[175]. - The company had cash and cash equivalents of $109.9 million as of September 30, 2025, expected to meet future cash needs[182]. Profitability and Expenses - Net income improved from a loss of $43.1 million in Q3 2024 to a profit of $2.8 million in Q3 2025, a turnaround of $45.9 million[145]. - Net income for the nine months ended September 30, 2025 was $36.4 million, a significant increase of $79.3 million compared to a net loss of $42.9 million for the same period in 2024[160]. - Gross profit margin declined from 60.7% in Q3 2024 to 59.9% in Q3 2025, a decrease of 80 basis points[144]. - General and administrative expenses rose by 10% from $16.5 million in Q3 2024 to $18.2 million in Q3 2025[151]. - Income tax expense increased to $15.5 million for the nine months ended September 30, 2025, compared to a tax benefit of $6.7 million for the same period in 2024, due to an increase in income before taxes[174]. Debt and Financing - The company refinanced its credit facility in April 2024, resulting in outstanding term loan borrowings of $70.3 million and no borrowings on the revolving line of credit as of September 30, 2025[176]. - The 2024 Credit Facility includes interest rates based on SOFR (2.75% to 3.50%) or Base Rate (1.75% to 2.5%) with annual minimum principal payments of 5%, 5%, 7.5%, 7.5%, and 10% over five years[177]. - As of September 30, 2025, the outstanding debt under the 2024 Credit Facility was $70.3 million, with no borrowings under the revolving line of credit[209]. - The company may seek additional debt or equity financing to support long-term capital requirements, which could be impacted by economic downturns[183]. Cash Flow - For the nine months ended September 30, 2025, cash flows from operating activities were approximately $40.7 million, including $37.9 million from litigation settlement proceeds[186]. - Cash utilized in financing activities for the nine months ended September 30, 2025, was $21.8 million, primarily for principal payments on the 2024 Credit Facility[195]. - Cash used in investing activities for the nine months ended September 30, 2025, totaled $3.9 million, primarily for capital expenditures[193]. Foreign Currency and Economic Impact - A hypothetical 10% change in foreign currency exchange rates would have impacted income before income taxes by plus or minus $0.9 million and cash flow by plus or minus $3.7 million[206]. - The company has not engaged in hedging foreign currency transactions to date but is evaluating future hedge transactions[205]. - The favorable foreign currency translation impact was $5.7 million for the nine months ended September 30, 2025, compared to an unfavorable impact of $1.9 million in the prior year[184]. Accounting Standards - The company is assessing the impact of the adoption of ASU 2025-05 and ASU 2025-06 on its Consolidated Financial Statements[201][203]. - ASU 2025-05 is effective for annual periods beginning after December 15, 2025, while ASU 2025-06 is effective after December 15, 2027[202][203]. - The company believes that no other recently issued accounting standards will have a material impact on its financial statements[204].