Rimini Street(RMNI)2025-02-28 07:05Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $114.2 million, a year-over-year increase of 1.9%, while full-year revenue was $428.8 million, a decrease of 0.6% [23] - Annualized recurring revenue (ARR) was $414.8 million for Q4 2024, a year-over-year decrease of 4.1% [24] - Billings for Q4 2024 were $172.1 million, up 7.1% year-over-year, while full-year billings were $423 million, an increase of 1.1% [25] - Gross margin was 63.7% for Q4 2024 and 60.9% for the full year, compared to 61% and 62.3% for the prior year respectively [26] - Net income attributable to shareholders for Q4 was $6.7 million, or $0.07 per diluted share, compared to $0.10 per diluted share in the prior year [33] Business Line Data and Key Metrics Changes - The company achieved 22 new client sales transactions in Q4 with total contract value (TCV) over $1 million [11] - PeopleSoft revenue was $8 million for Q4 2024, representing 7% of total revenue, compared to $8.5 million in Q4 2023 [37] Market Data and Key Metrics Changes - Client revenue for Q4 2024 within the United States represented 47%, while international clients represented 53% [23] - The billings improvement was led by the LatAm, EMEA, and Asia-Pacific regions [12] Company Strategy and Development Direction - The company is focusing on a new go-to-market strategy in the Americas, adopting a hunter-farmer sales model to drive growth [13] - Strategic partnerships, such as with ServiceNow, are aimed at providing enterprise application modernization solutions without costly upgrades [17] - The company is expanding its services to more software products, particularly VMware, which is expected to drive significant growth [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth and higher profitability, indicating that the company is on the "upside of the U" in terms of recovery [44][82] - The company is currently suspending guidance until there is more clarity around ongoing litigation with Oracle, but expects to return to providing guidance in 2025 [38][76] Other Important Information - The company has been involved in litigation with Oracle for over 15 years, with recent positive developments in the Rimini II case [19] - The company ended Q4 2024 with a cash balance of $88.8 million, down from $125.3 million in the prior year [35] Q&A Session Summary Question: Can you talk about the changes you've made in sales and the pipeline? - Management indicated that they believe they are on the path to recovery and have seen positive metrics in sales execution and pipeline growth [44][82] Question: How has the litigation impacted the pipeline? - Management acknowledged that the litigation had an impact on the pipeline but expressed optimism about future growth following recent court decisions [47] Question: Can you clarify the cost savings mentioned? - Management clarified that the $22 million in net annualized savings is as of the midpoint of Q1 2025, with a net reduction of $18 million by the end of Q4 2024 [49][51] Question: What areas are contributing to the strength in billings? - Management noted that the strength in billings is due to improved execution globally, with notable performance outside the U.S. [61] Question: What is the status of the partnership with ServiceNow? - Management stated that the partnership is progressing well, with significant pipeline development and alignment of teams [87] Question: What are the expectations for VMware's contribution to sales? - Management expressed excitement about VMware's potential, indicating it will be a substantive part of sales in 2025 [90]