Rimini Street(RMNI) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section details the company's unaudited financial statements and management's analysis of its financial condition and operations ITEM 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, providing a detailed view of the company's financial position and performance for the periods ended September 30, 2022 Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and stockholders' deficit as of September 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands): | Metric | September 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------------- | :------------------ | | Total Assets | $333,349 | $391,262 | | Total Liabilities | $408,724 | $471,648 | | Total Stockholders' Deficit | $(75,375) | $(80,386) | | Cash and Cash Equivalents | $118,576 | $119,571 | | Accounts Receivable, net | $59,223 | $135,447 | | Deferred Revenue, current | $212,070 | $253,221 | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This section outlines the company's revenues, expenses, and net income (loss) for the three and nine months ended September 30, 2022 and 2021 Statements of Operations Highlights (in thousands, except per share amounts): | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | $101,931 | $95,642 | $301,041 | $275,151 | | Gross Profit | $62,660 | $62,266 | $187,219 | $173,344 | | Operating Income | $2,035 | $7,527 | $13,664 | $14,026 | | Net Income (Loss) | $(405) | $1,931 | $2,792 | $5,162 | | Diluted EPS | $0.00 | $(0.08) | $0.03 | $(0.26) | - Revenue increased by 6.6% for the three months and 9.4% for the nine months ended September 30, 2022, compared to prior periods, while net income significantly decreased, resulting in a net loss of $0.4 million for the three months ended September 30, 2022[12] Unaudited Condensed Consolidated Statements of Stockholders' Deficit This section details changes in the company's equity, including total stockholders' deficit, additional paid-in capital, and accumulated deficit Stockholders' Deficit Highlights (in thousands): | Metric | September 30, 2022 | September 30, 2021 | | :----------------------------------- | :------------------- | :------------------- | | Total Stockholders' Deficit, end of period | $(75,375) | $(160,164) | | Additional Paid-in Capital (9 months ended Sep 30) | $154,111 | $139,505 | | Accumulated Deficit (9 months ended Sep 30) | $(222,997) | $(295,846) | - The total stockholders' deficit improved from $(80,386) thousand at December 31, 2021, to $(75,375) thousand at September 30, 2022, primarily due to an increase in additional paid-in capital and a reduction in accumulated deficit[9][15] Unaudited Condensed Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2022 and 2021 Cash Flow Summary (Nine Months Ended September 30, in thousands): | Activity | 2022 | 2021 | | :----------------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $36,757 | $47,814 | | Net cash used in investing activities | $(14,292) | $(1,455) | | Net cash used in financing activities | $(12,412) | $(25,990) | | Cash, cash equivalents and restricted cash at end of period | $118,993 | $103,440 | - Net cash provided by operating activities decreased by 23.1% year-over-year, while net cash used in investing activities significantly increased due to investment purchases, and net cash used in financing activities decreased, reflecting reduced payments for preferred stock redemption compared to the prior year[17][203][209][212][213] Notes to Unaudited Condensed Consolidated Financial Statements This section provides additional information and explanations for the figures presented in the financial statements, covering business operations, significant accounting policies, and other relevant disclosures - Rimini Street, Inc. is a global provider of enterprise software support services, offering subscription-based solutions to replace or supplement vendor support[21] - As of September 30, 2022, current liabilities exceeded current assets by $61.6 million, with a net loss of $0.4 million for the three months ended September 30, 2022, while the company held $119.0 million in cash, cash equivalents, and restricted cash, and $11.1 million in short-term investments[24] - The company prepaid $5.0 million of its Credit Facility debt on May 31, 2022, and amended the facility to increase the common stock repurchase authorization to $50 million[34][35] - The Board of Directors authorized an increase to the stock repurchase program from $15.0 million to $50.0 million over four years[52] - The company is involved in ongoing litigation with Oracle (Rimini I and Rimini II), where in Rimini I, the company was found liable for 'innocent infringement' and paid $89.9 million, and in Rimini II, Oracle withdrew all monetary damages claims, proceeding with a bench trial for equitable relief[75][83][84] Revenue by Geographic Region (in thousands) | Region | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :----------------------- | :----------------------------- | :----------------------------- | | United States of America | $159,616 | $147,600 | | International | $141,425 | $127,551 | | Total | $301,041 | $275,151 | ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and liquidity, covering business overview, economic impacts, recent developments, and key business metrics - Rimini Street is a global provider of enterprise software management and support products and services, recognized as a leading independent software support provider for Oracle and SAP products, expanding offerings to include Rimini Protect™ security solutions, open source database support, and Application Management Services (AMS) for Oracle and SAP, as well as support for SaaS solutions like Salesforce[127][128][129][130][131][132][133] - The company's ability to operate has not been significantly adversely impacted by the COVID-19 pandemic, but rising interest rates, inflationary pressures, and geopolitical uncertainties (e.g., Russia-Ukraine conflict) are ongoing macroeconomic challenges[28][144] - Public and Private Placement Warrants expired unexercised on October 10, 2022[147] - The Common Stock repurchase program was increased from $15.0 million to $50.0 million over four years[148](index=