Rimini Street(RMNI)2024-10-31 01:46Financial Data and Key Metrics Changes - Revenue for Q3 2024 was 401.5 million, a year-over-year decrease of 3.6% [18] - Billings for Q3 2024 were 60.5 million in the prior year [19] - Gross margin was 60.7% of revenue, down from 62.7% in the prior year, but increased 160 basis points sequentially [19] - Net loss attributable to shareholders was negative 0.47 per diluted share, compared to net income of 24.9 million, or 8% of revenue, for the first nine months of 2024 [25] - The company is winding down services for Oracle PeopleSoft products, which is expected to lead to significant revenue reductions over time [25] Market Data and Key Metrics Changes - Clients within the United States represented 49% of total revenue, while international clients represented 51% for Q3 2024 [18] - Billings improvements were led by the North America and Asia Pacific regions [13] Company Strategy and Development Direction - The company has formed a strategic partnership with ServiceNow to provide a unified intelligent platform for enterprise software modernization [9] - The partnership aims to deliver an exclusive enterprise application modernization and AI solution without requiring costly upgrades or migrations [9][10] - The company is focused on optimizing costs and enhancing shareholder value while navigating ongoing litigation with Oracle [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the actions taken to return to growth and profitability, despite challenges from Oracle litigation [17] - The company is continuing to suspend guidance on future financial results until there is more clarity regarding litigation impacts [26] - Management noted that the business is showing signs of stabilization and potential growth, particularly in North America [45] Other Important Information - The company has achieved approximately 58.5 million in compliance with a court order related to ongoing litigation [15][22] Q&A Session Summary Question: Completion of cost-cutting objectives - Management plans to complete the cost-cutting plan by the end of Q4 2024 [28] Question: Clarification on ServiceNow partnership - Rimini Street will handle all work related to the ServiceNow layer, integrating it with existing products [30] Question: Revenue expectations for new offerings - The ramp-up for new offerings is expected to take time, with initial sales discussions already underway [31] Question: Impact of new services on gross margin - New offerings typically have lower gross margins initially, but management is focused on maintaining acceptable margins [35] Question: Cash flow challenges - Cash flow patterns show typical burn in the second half of the year, exacerbated by the recent payment to Oracle [36] Question: Billings growth in Q4 - Management is optimistic about achieving positive billings growth in Q4 based on current pipeline strength [39] Question: Customer retention trends - Management indicated that retention numbers have stabilized, with potential for positive revenue growth when excluding certain one-time events [44] Question: Sales headcount strategy - The sales team has been restructured to focus on new logo acquisition, with a split between new sales and cross-selling [71] Question: Customer reaction to ServiceNow offering - Customer feedback has been positive, with interest in the ability to modernize systems without major upgrades [53]