LAS VEGAS, November 7, 2019 – Rimini Street, Inc. (Nasdaq: RMNI), a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products and a Salesforce partner, today announced results for the third quarter ended September 30, 2019.
“In the third quarter, we continued to see improving performance from investments made over the past eighteen months in global sales capacity, productivity and infrastructure,” stated Seth A. Ravin, Rimini Street co-founder, CEO and Chairman of the Board. “We also continued expanding our global capabilities and new product and service offerings, opening operations in Dubai to serve the Gulf region and announcing the global availability of Application Management Services for SAP. In addition, today we announced the global availability of Application Management Services for Oracle Database and Applications.”
“Third quarter revenue, sales and marketing and general and administrative spend were all within our quarter guidance range, and gross margin for the third quarter and year-to-date are both above our previously provided guidance ranges,” stated Tom Sabol, Rimini Street CFO. “We remain committed to the long-term goals of top-line revenue growth, strong free cash flow and achieving sustained GAAP profitability.”
Third Quarter 2019 Financial Highlights
- Revenue was $69.0 million for the 2019 third quarter, an increase of 10.1% compared to $62.6 million for the 2018 third quarter.
- Annualized Subscription Revenue was approximately $274 million for the 2019 third quarter, an increase of 10% compared to $250 million for the 2018 third quarter.
- Active Clients as of September 30, 2019 were 2,032, an increase of 17.3% compared to 1,732 Active Clients as of September 30, 2018.
- Revenue Retention Rate was 91.5% for the trailing 12 months ended September 30, 2019 compared to 92.0% for the comparable period ended September 30, 2018.
- Gross margin was 62.4% for the 2019 third quarter compared to 64.5% for the 2018 third quarter.
- Operating income was $2.5 million for both the 2019 and 2018 third quarters.
- Non-GAAP Operating Income was $7.5 million for the 2019 third quarter compared to $10.7 million for the 2018 third quarter.
- Net income was $1.7 million for the 2019 third quarter compared to a net loss of $48.4 million for the 2018 third quarter.
- Non-GAAP Net Income was $6.7 million for both the 2019 third quarter and the 2018 third quarter.
- Adjusted EBITDA for the 2019 third quarter was $7.6 million compared to $10.8 million for the 2018 third quarter.
- Basic and diluted earnings per share attributable to common stockholders was a net loss per share of $0.07 per share for the 2019 third quarter compared to a net loss per share of $0.85 per share for the 2018 third quarter.
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures, why we believe they are meaningful and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”
Third Quarter 2019 Company Highlights
- Announced that global auto manufacturer, Hyundai-Kia Motors, selected Rimini Street for support and maintenance of its global database portfolio.
- Announced the global availability of the Company’s Application Management Services for SAP, offering clients a turnkey support solution to run their SAP systems which integrates both AMS and Support Services for SAP.
- Expanded investment in the Middle East, including the establishment of a new subsidiary and office in Dubai, and hiring local staff to support increasing demand in the Gulf region.
- Closed over 7,500 support cases, and scored an overall average of 4.8 in client satisfaction (where 5.0 is excellent).
- Delivered more than 15,000 tax, legal and regulatory updates to clients globally for PeopleSoft, JD Edwards, SAP and Oracle E-Business Suite products.
- Announced numerous award wins including:
◦ A gold Stevie ABA award and a silver Stevie IBA award to the Global SAP Support team for Customer Service Team of the Year;
◦ A gold Stevie ABA and a gold Stevie IBA award for Company of the Year | Computer Services;
◦ Four awards in total from the Customer Sales and Service Awards including gold awards for Milestone of the Year and Customer Service Outstanding Performance of the Year.
- Presented at 13 CIO, CFO and IT procurement leader events including CFO.org in New York, IDC’s CIO Empowerment conference in Puerto Vallarta, Mexico, Gartner’s ITAM Summit in Dallas, and the Japan Information Systems User Association in Tokyo.
2019 Revenue Guidance
The Company is maintaining the midpoint of our full year guidance of $275 million, while narrowing the range to $274.5 million to $275.5 million and guiding fourth quarter 2019 revenue to be in the range of $71.3 million to $72.3 million.
Rimini Street announced today that Thomas Sabol has resigned as CFO effective November 15, 2019 to pursue another opportunity in the state in which he resides. Stanley Mbugua, previously the Company’s Vice President and Corporate Controller, was appointed Group Vice President and Chief Accounting Officer effective November 5, 2019. The Company is actively recruiting a new Chief Financial Officer. “I want to thank Tom for his financial stewardship over the past three years, which included the successful completion of several substantial refinancing transactions and taking the company public in 2017. We wish him well in his new role,” stated Mr. Ravin.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the third quarter 2019 results at 5:00 p.m. Eastern / 2:00 p.m. Pacific time on November 7, 2019. A live webcast of the event will be available on Rimini Street’s Investor Relations site at https://investors.riministreet.com/events-and-presentations/upcoming-and-past-events. Dial-in participants can access the conference call by dialing (855) 213-3942 in the U.S. and Canada and enter the code 8398042. A replay of the webcast will be available for at least 90 days following the event.
Company’s Use of Non-GAAP Financial Measures
This press release contains certain “non-GAAP financial measures.” Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with disclosures required by U.S. generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. Presented under the heading “About Non-GAAP Financial Measures and Certain Key Metrics” is a description and explanation of our non-GAAP financial measures.