Financial Data and Key Metrics Changes - Net billings for Q4 2023 were flat compared to Q4 2022 at $160.7 million, while full-year billings increased by 2.3% to $418.5 million [19] - Revenue for Q4 2023 was $112.1 million, a 3.2% increase year-over-year, and for the full year 2023, revenue was $431.5 million, up 5.3% [29] - Gross margin for Q4 2023 was 61% and 62.3% for the full year, compared to 64.5% and 62.8% respectively in the prior year [30] - Net income attributable to shareholders for Q4 was $9.4 million or $0.10 per diluted share, and for the full year 2023 was $26.1 million or $0.29 per diluted share [63] Business Line Data and Key Metrics Changes - The Rimini Custom service was launched, allowing clients to request custom support solutions for a broader set of enterprise software [24] - The company reported strong demand for its end-to-end ERP outsourcing solutions, particularly for SAP products and Salesforce AMS solutions [23] Market Data and Key Metrics Changes - Clients in the United States represented 51% of total revenue, while international clients accounted for 49% for both Q4 and full year 2023 [29] - The revenue retention rate for service subscriptions was 90%, with over 79% of subscription revenue being non-cancelable for at least 12 months [58] Company Strategy and Development Direction - The company is focused on developing a Rimini Smart Path roadmap to help clients allocate IT resources effectively [20] - Rimini Street aims to position itself as a trusted partner for mission-critical IT services, consolidating vendor management for clients [52] - The company is investing in expanding its global infrastructure to support new product lines and enhance service delivery [40] Management's Comments on Operating Environment and Future Outlook - Management has suspended guidance on future financial results due to ongoing litigation with Oracle, emphasizing the need for clarity before making projections [37] - The company is confident in its actions and investments to accelerate growth and enhance shareholder value, despite potential risks from litigation outcomes [56] Other Important Information - The company ended the fiscal year with a cash balance of $115.4 million and reduced its term loan principal from $78.3 million to $72.6 million [64] - Deferred revenue as of December 31, 2023, was approximately $287 million, down from $300 million the previous year [65] Q&A Session Summary Question: How does the company plan to manage operating expenses in light of suspended revenue guidance? - Management indicated that they are not looking to reduce costs but will continue to invest in expanding the sales force and global infrastructure to support growth [40][41] Question: What is driving the deceleration in international business growth? - Management noted challenges in the ANZ and EMEA regions but has taken steps to address these issues with new leadership [70] Question: How is the company managing its employee count while reducing non-GAAP operating expenses? - The company hires on a just-in-time basis, minimizing costs by waiting for contracts to be signed before hiring [46] Question: What are the expectations for legal expenses in 2024? - Legal expenses are expected to be more moderate in 2024 compared to 2023, as there are no trials scheduled for the year [98] Question: How is the company addressing customer churn and retention? - Management acknowledged some larger cancellations but emphasized that many clients are still engaged with other products [42][105]
Rimini Street(RMNI) - 2023 Q4 - Earnings Call Transcript