Rimini Street(US:RMNI)2023-05-04 02:37Financial Data and Key Metrics Changes - Revenue for Q1 2023 was a record $105.5 million, representing a year-over-year increase of 7.8% [35] - Annualized recurring revenue reached $408.3 million, a year-over-year increase of 6.1% [36] - Net income attributable to shareholders was $5.6 million, an increase of 82.7% year-over-year [47] - Adjusted EBITDA for Q1 was $16.6 million, or 15.7% of revenue, compared to $12.9 million, or 13.2% of revenue for the prior year [48] - Cash and short-term investments totaled $135 million, compared to $129 million as of December 31, 2022 [49] Business Line Data and Key Metrics Changes - The company launched its expanded solutions portfolio, including the Rimini ONE offering, which has already signed over 100 clients [11][12] - The revenue retention rate for service subscriptions was 92% for the trailing 12 months, with more than 75% of subscription revenue being non-cancelable for at least 12 months [36] Market Data and Key Metrics Changes - Clients in the United States represented 50.6% of total revenue, while international clients contributed 49.4% [35] - International revenue growth was 14%, compared to 2% growth in the U.S. [58] Company Strategy and Development Direction - The company aims to consolidate IT service providers for clients, enhancing vendor management and purchasing power [16] - The focus is on increasing sales execution in the U.S. market, which is seen as a key area for growth [58][60] - The company is positioned to help clients navigate economic pressures by reallocating IT spending towards innovation [97] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for their services, noting that economic uncertainty often leads to increased interest in their offerings [65][97] - The company is focused on improving sales execution in the U.S. to capitalize on existing demand [58][60] - Management anticipates a strong third quarter, contrasting it with previous years' challenges [94] Other Important Information - The company has been in litigation with Oracle for over 12 years, with ongoing proceedings that do not currently prohibit support services for Oracle products [26][28] - The company expects to maintain a strong balance sheet while managing litigation costs, with outside litigation expenses projected to be around $10 million for the full year [46] Q&A Session Summary Question: What needs to be accomplished for U.S. growth? - Management acknowledged the need for improved sales execution in the U.S. and noted a 20% higher pipeline for Q2 compared to the previous year [57] Question: What is the expected acceleration in demand? - Management believes that demand is strong and that execution is the primary challenge, with improvements expected as they enhance their sales efforts [59][60] Question: How are sales cycles and decision-making impacted by the macro environment? - Management indicated that economic uncertainty has not negatively impacted their pipeline and that they are often sought after during challenging times [65] Question: What is the average sales price for support deals? - The average sales price for a support deal is approximately $200,000, but variability exists in new offerings like Rimini ONE [67] Question: What are the expectations for billings growth? - Management expressed dissatisfaction with the 2% growth in North America and aims for over 20% growth overall [85] Question: What is the customer count? - The company has over 3,000 aggregate clients, with more than 1,500 unique clients [74]