Rimini Street(US:RMNI)2022-08-03 20:06Financial Performance - For the three months ended June 30, 2022, the company generated revenue of $101.2 million, representing a 10% increase from $91.6 million in the same period of 2021[132]. - Revenue increased from $91.6 million for the three months ended June 30, 2021, to $101.2 million for the three months ended June 30, 2022, an increase of $9.6 million or 10%[155]. - Revenue increased from $179.5 million for the six months ended June 30, 2021 to $199.1 million for the same period in 2022, an increase of $19.6 million or 11%[172]. - Annualized recurring revenue was $397 million as of June 30, 2022, compared to $362 million as of June 30, 2021, indicating a growth in the client base[149]. - The revenue retention rate improved to 95% for the 12 months ended June 30, 2022, compared to 94% for the same period in 2021, indicating strong client loyalty[151]. - Gross profit increased from $57.0 million for the three months ended June 30, 2021 to $63.9 million for the same period in 2022, an increase of $6.8 million or 12%[159]. - Gross profit margin was approximately 63.1% for the three months ended June 30, 2022, up from 62.2% for the same period in 2021, demonstrating operational efficiency[153]. - Operating income increased by 24.1% from $4.6 million for the three months ended June 30, 2021, to $5.7 million for the same period in 2022[154]. - Net income for the six months ended June 30, 2022 was $3.2 million, a slight decrease of 1.1% compared to $3.2 million for the same period in 2021[171]. Client Base and Market Presence - As of June 30, 2022, the company supported over 2,900 active clients globally, including 71 Fortune 500 companies and 16 Fortune Global 100 companies[131]. - The number of active clients increased from 2,640 as of June 30, 2021, to over 2,900 as of June 30, 2022, reflecting successful sales and marketing efforts[145]. - Approximately 53% of the company's revenue for the three months ended June 30, 2022, was generated in the United States, while 47% was from foreign jurisdictions[132]. - Approximately 47% of revenue for the three months ended June 30, 2022, was generated from international business, compared to 46% in the same period of 2021[209]. Expenses and Costs - The cost of revenue rose from $34.6 million for the three months ended June 30, 2021, to $37.3 million for the same period in 2022, an increase of 8%[156]. - General and administrative expenses increased from $16.5 million for the three months ended June 30, 2021 to $18.9 million for the same period in 2022, an increase of $2.4 million or 14%[162]. - Sales and marketing expenses increased from $33.2 million for the three months ended June 30, 2021 to $36.2 million for the same period in 2022, an increase of $3.0 million or 9%[160]. - Interest expense increased from $38 thousand for the three months ended June 30, 2021 to $1.0 million for the same period in 2022, an increase of $1.0 million[166]. - Litigation costs, net of related insurance recoveries, increased from $2.8 million for the three months ended June 30, 2021 to $3.1 million for the same period in 2022, an increase of $0.3 million[164]. - General and administrative expenses increased by $5.7 million or 17%, from $33.1 million for the six months ended June 30, 2021, to $38.8 million for the same period in 2022[177]. - Interest expense rose significantly from $85 thousand to $1.8 million, an increase of $1.7 million, primarily due to a new $90 million Credit Facility[180]. Cash Flow and Capital Management - Cash flows from operating activities for the six months ended June 30, 2022, were approximately $60.8 million, up from $47.2 million in the same period of 2021[192]. - The company had available cash, cash equivalents, and restricted cash of $160.6 million as of June 30, 2022[184]. - Deferred revenue amounted to $255.4 million as of June 30, 2022, reflecting the company's business model of collecting cash in advance for services[189]. - Cash utilized in financing activities for the six months ended June 30, 2022, was $10.7 million, down from $20.2 million in the same period of 2021[202][203]. - The principal payments related to the Credit Facility amounted to $7.3 million for the six months ended June 30, 2022[202]. Strategic Initiatives and Innovations - The company launched Rimini Protect™, a suite of security solutions providing proactive security protection for Oracle and SAP environments in July 2022[122]. - The company expanded its Application Management Services (AMS) to include support for leading open source database platforms, including MySQL and PostgreSQL, in September 2020[123]. - The company aims to innovate and deliver new products and services to meet the evolving needs of its clients in the enterprise software support market[120]. - The company expects to continue investing in the development and improvement of new and existing products and services to address client needs[138]. Stock and Debt Management - The company acquired 0.7 million shares of Common Stock on the open market at a total cost of $3.7 million during the six months ended June 30, 2022[143]. - The company has authorized an increase in its Common Stock repurchase program from up to $15.0 million to up to $50.0 million over the next four years[141]. - The company had $80.5 million outstanding debt under the Credit Facility as of June 30, 2022[214]. - A hypothetical adverse change of 100 basis points in LIBOR would increase annual interest expense by approximately $0.8 million[214]. Foreign Currency and Risk Management - The effect of foreign currency translation resulted in unfavorable impacts of $7.7 million for the six months ended June 30, 2022, compared to $3.3 million in the same period of 2021[193]. - The company experienced a significant change in foreign currency exchange rates that materially impacted its financial statements due to the strengthening of the U.S. dollar[210]. - The company has not engaged in hedging foreign currency transactions to date but is evaluating the costs and benefits of such a program[209]. - The company does not intend to repatriate amounts invested overseas back to the U.S.-based parent[204]. - The company entered into an interest rate swap for a notional value of $40.0 million on May 18, 2022[214].