Rimini Street(US:RMNI)2025-10-30 22:00Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $103.4 million, a year-over-year decrease of 1.2%, with the U.S. representing 45% and international 55% of total revenue [13] - Annualized recurring revenue (ARR) was $391 million, a year-over-year decrease of 2.6% [13] - Billings for Q3 were $66.5 million, up 2% year-over-year, while adjusted billings, excluding PeopleSoft-associated billings, were $63.9 million, an increase of 6.7% [13][14] - Gross margin for Q3 was 59.9% of revenue compared to 60.7% for the prior year [14] - Net income attributable to shareholders for Q3 was $2.8 million, or $0.03 per diluted share, compared to a net loss of $0.47 per diluted share in the prior year [17] Business Line Data and Key Metrics Changes - Closed 17 new client sales transactions in Q3 with total contract value (TCV) of $63.1 million, compared to 19 transactions for $48.7 million in the prior year [5] - Achieved record RPO backlog of $611.2 million, up 6.4% year-over-year [5][19] - PeopleSoft revenue was approximately 5% of total revenue for Q3, down from 8% in the prior year [20] Market Data and Key Metrics Changes - The company added 79 new logos in Q3, with sales spanning various industries and geographies [5] - International sales growth was driven by SAP, which is a larger product than Oracle in the international market [40] Company Strategy and Development Direction - The company is focusing on its three core service pillars: support, optimize, and innovate, with a new emphasis on agentic AI ERP solutions [4][12] - A strategic partnership with American Digital aims to provide full-stack solutions, enhancing customer offerings without requiring costly upgrades [10][59] - The company plans to leverage its GSA Multiple Award Schedule to enhance its business with U.S. government agencies [9][50] Management's Comments on Operating Environment and Future Outlook - Management noted that the Oracle litigation settlement has positively impacted engagement levels with prospects and partners [42] - The company expects to provide forward-looking guidance at the Analyst and Investor Day on December 3, 2025, outlining market opportunities and financial goals [21] - Management believes that the combination of support services and new AI technology will drive growth and improve profitability [28][29] Other Important Information - The company plans to wind down its support for Oracle PeopleSoft products by July 31, 2028, as part of the Oracle settlement [11][20] - Operating cash flow for Q3 increased significantly due to litigation settlement proceeds, with a cash balance of $108.7 million at the end of the quarter [18][19] Q&A Session Summary Question: Can you expand on the 24 agentic AI wins with ServiceNow? - Management confirmed 26 customers are engaged with the ServiceNow component, with expectations to monetize these by 2026 [26][27] Question: What will it take to return to double-digit top-line growth? - Management indicated that becoming the support and agentic AI ERP company will drive growth, leveraging existing systems and technology [28][29] Question: What is the current status of indirect sales channels? - Management stated that indirect sales channels are maturing and will be detailed further at the upcoming investor day [30][32] Question: How has engagement changed post-Oracle settlement? - Management noted an increase in engagement from prospects and partners who were previously hesitant due to litigation concerns [42][43] Question: What impact do you expect from the GSA schedule? - Management sees the GSA schedule as a significant opportunity for government contracts, allowing direct procurement without competitive processes [50][51]