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Rimini Street Announces Fiscal Third Quarter 2019 Financial Results

Quarterly revenue of $69.0 million, up 10.1% year over year

Quarterly gross margin of 62.4%, down from 64.5% year over year

2,032 active clients at September 30, 2019, up 17.3% year over year

LAS VEGAS, November 7, 2019Rimini 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.

CFO Transition

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.

About Non-GAAP Financial Measures and Certain Key Metrics

To provide investors and others with additional information regarding Rimini Street’s results, we have disclosed the following non-GAAP financial measures and certain key metrics. We have described below Active Clients, Annualized Subscription Revenue and Revenue Retention Rate, each of which is a key operational metric for our business. In addition, we have disclosed the following non-GAAP financial measures: non-GAAP operating income, non-GAAP net income (loss), EBITDA, and adjusted EBITDA. Rimini Street has provided in the tables above a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Due to a valuation allowance for our deferred tax assets, there were no tax effects associated with any of our non-GAAP adjustments. These non-GAAP financial measures are also described below.

The primary purpose of using non-GAAP measures is to provide supplemental information that management believes may prove useful to investors and to enable investors to evaluate our results in the same way management does. We also present the non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis, as well as comparing our results against the results of other companies, by excluding items that we do not believe are indicative of our core operating performance. Specifically, management uses these non-GAAP measures as measures of operating performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communications with our board of directors concerning our financial performance. Investors should be aware however, that not all companies define these non-GAAP measures consistently.

Active Client is a distinct entity that purchases our services to support a specific product, including a company, an educational or government institution, or a business unit of a company. For example, we count as two separate active clients when support for two different products is being provided to the same entity. We believe that our ability to expand our active clients is an indicator of the growth of our business, the success of our sales and marketing activities, and the value that our services bring to our clients.

Annualized Subscription Revenue is the amount of subscription revenue recognized during a fiscal quarter and multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period from our existing client base assuming no cancellations or price changes occur during that period. Subscription revenue excludes any non-recurring revenue, which has been insignificant to date.

Revenue Retention Rate is the actual subscription revenue (dollar-based) recognized over a 12-month period from customers that were clients on the day prior to the start of such 12-month period, divided by our Annualized Subscription Revenue as of the day prior to the start of the 12-month period.

Non-GAAP Operating Income is operating income adjusted to exclude: litigation costs and related recoveries, net, and stock-based compensation expense. The exclusions are discussed in further detail below.

Non-GAAP Net Income (Loss) is net income (loss) adjusted to exclude: litigation costs and related recoveries, net, post-judgment interest in litigation awards, write-off of deferred debt financing costs, extinguishment charges upon payoff of credit facility, stock-based compensation expense, and gain from change in fair value of embedded derivatives. These exclusions are discussed in further detail below.

Specifically, management is excluding the following items from its non-GAAP financial measures, as applicable, for the periods presented:

Litigation Costs and Related Recoveries, Net: Litigation costs and the associated insurance and appeal recoveries relate to outside costs of litigation activities. These costs and recoveries reflect the ongoing litigation we are involved with, and do not relate to the day-to-day operations or our core business of serving our clients.

Stock-Based Compensation Expense: Our compensation strategy includes the use of stock-based compensation to attract and retain employees. This strategy is principally aimed at aligning the employee interests with those of our stockholders and to achieve long-term employee retention, rather than to motivate or reward operational performance for any particular period. As a result, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.

Post-judgment interest in litigation awards: Post-judgment interest resulted from our appeals of ongoing litigation and does not relate to the day-to-day operations or our core business of serving our clients.

Write-off of Deferred Debt Financing Costs: The write-off of deferred financing costs related to certain costs that were expensed in 2018 due to an unsuccessful debt financing.

Extinguishment charges upon payoff of Credit Facility: These costs included interest expense and other debt financing expenses, including the make-whole applicable premium and the write-off of debt discount and issuance costs that resulted from the payoff of our former credit facility on July 19, 2018.  Since these amounts related to our debt financing structure, we have excluded them since they do not relate to the day-to-day operations or our core business of serving our clients. Extinguishment Charges Upon Payoff of Credit Facility: These costs included interest expense and other debt financing expenses, including the make-whole applicable premium and the write-off of debt discount and issuance costs that resulted from the payoff of our former credit facility on July 19, 2018. Since these amounts related to our debt financing structure, we have excluded them since they do not relate to the day-to-day operations or our core business of serving our clients.

Gain from Change in Fair Value of Embedded Derivatives: Our former credit facility included features that were determined to be embedded derivatives requiring bifurcation and accounting as separate financial instruments. We have determined to exclude the gains and losses on embedded derivatives related to the change in fair value of these instruments given the financial nature of this fair value requirement. We were not able to manage these amounts as part of our business operations, nor were the costs core to servicing our clients, so we have excluded them.

Other Debt Financing Expenses: Other debt financing expenses included non-cash write-offs (including write-offs due to payoff), accretion, amortization of debt discounts and issuance costs, and collateral monitoring and other fees payable in cash related to our former credit facility. Since these amounts related to our debt financing structure, we have excluded them since they do not relate to the day-to-day operations or our core business of serving our clients.

EBITDA is net income (loss) adjusted to exclude: interest expense, income tax expense, and depreciation and amortization expense.

Adjusted EBITDA is EBITDA adjusted to exclude: litigation costs and related recoveries, net, write-off of deferred debt financing costs, post-judgment interest in litigation awards, write-off of deferred debt financing costs, stock-based compensation expense, gain from change in fair value of embedded derivatives, and other debt financing expenses, as discussed above.

À propos de Rimini Street, Inc.

Rimini Street, Inc. (Nasdaq : RMNI) est un fournisseur mondial de services et produits logiciels d’entreprise, le premier prestataire de services de support tiers pour les produits logiciels Oracle et SAP, et un partenaire Salesforce. La société propose d’excellents services ultraréactifs et intégrés de gestion d’applications et d’assistance, qui permettent aux détenteurs de licences de logiciels d’entreprise de réaliser des économies substantielles, de libérer des ressources pour l’innovation et d’obtenir de meilleurs résultats. Près de 2 100 organisations internationales du classement Fortune 500, du marché intermédiaire et du secteur public, ainsi que d’autres organisations représentant un large éventail de secteurs ont choisi Rimini Street comme fournisseur de confiance de services et de produits logiciels d’application d’entreprise. Pour en savoir plus, consultez le site https://www.riministreet.com, suivez @riministreet sur Twitter, et rejoignez Rimini Street sur Facebook et LinkedIn(C-RMNI)

Déclarations prévisionnelles

Certaines déclarations contenues dans le présent communiqué ne constituent pas des faits historiques, mais sont des déclarations prévisionnelles aux fins des dispositions de la règle refuge sous la loi Private Securities Litigation Reform Act de 1995. Les déclarations prévisionnelles sont généralement accompagnées de mots, tels que « pourrait », « devrait », « serait », « aurait », « projette », « envisage de », « prévoit de », « croit », « estime », « prédit », « potentiel », « semble », « cherche à », « continue de », « futur », « s’attend à », « perspectives », l’emploi du futur ou du conditionnel ou d’autres mots, phrases ou expressions similaires. Ces déclarations prévisionnelles incluent, sans toutefois s’y limiter, des déclarations concernant nos attentes relatives aux événements futurs, opportunités futures, expansions mondiales et autres initiatives de croissance, ainsi qu’à nos investissements dans de telles initiatives. Ces déclarations sont fondées sur diverses hypothèses et sur les attentes actuelles de la direction, et ne constituent ni des prédictions de la performance réelle ni des faits historiques. Ces déclarations sont assujetties à un certain nombre de risques et d’incertitudes concernant les activités de Rimini Street, et les résultats réels pourront être sensiblement différents. Ces risques et incertitudes comprennent, sans toutefois s’y limiter, la durée et les impacts économiques, opérationnels et financiers sur nos activités de la pandémie de COVID-19, ainsi que les mesures prises par les autorités gouvernementales, les clients ou autres en réponse à la pandémie de COVID-19 ; tous événements catastrophiques qui perturberaient nos activités ou l’activité de nos clients actuels ou potentiels, les changements de l’environnement commercial dans lequel évolue Rimini Street, notamment l’inflation et les taux d’intérêt, ainsi que les conditions financières, économiques, réglementaires et politiques générales affectant le secteur dans lequel Rimini Street exerce ses activités ; les évolutions défavorables des litiges en cours ou dans les enquêtes gouvernementales ou tout nouveau litige ; notre nécessité de et notre capacité à obtenir un financement supplémentaire des actions ou de la dette dans des conditions avantageuses, et notre capacité à générer des flux de trésorerie des opérations afin d’aider à financer l’investissement accru dans nos initiatives de croissance ; la suffisance de notre trésorerie et équivalents de trésorerie afin de satisfaire nos besoins en liquidités ; les conditions et l’impact de nos 13,00 % d’actions privilégiées de série A en circulation ; les changements au niveau des taxes, lois et réglementations ; l’activité en matière de tarification et de produits concurrentiels ; les difficultés de gestion de la rentabilité de la croissance ; l’adoption par les clients des produits et services que nous avons lancés récemment, notamment nos Application Management Services (AMS), Rimini Street Advanced Database Security, et les services associés aux produits Salesforce Sales Cloud et Service Cloud, parallèlement aux autres produits et services que nous prévoyons de lancer dans un avenir proche ; le départ d’un ou de plusieurs membres de l’équipe de direction de Rimini Street ; l’incertitude quant à la valeur à long terme des titres de participation de Rimini Street ; ainsi que les risques et incertitudes abordés dans la rubrique « Facteurs de risque » du rapport trimestriel de Rimini Street sur formulaire 10-Q, déposé le 7 mai 2020 et, tels qu’actualisés de temps à autre, les rapports annuels futurs de Rimini Street sur formulaire 10-K, les rapports trimestriels sur formulaire 10-Q, les rapports de situation ponctuelle sur formulaire 8-K, ainsi que les autres documents déposés par Rimini Street auprès de la Commission des valeurs et des changes. En outre, ces déclarations prévisionnelles expriment les attentes, projets ou prévisions d’événements et de points de vue futurs de Rimini Street, à la date de ce communiqué. Rimini Street s’attend à ce que ses évaluations changent en réponse à des événements et à des développements ultérieurs. Cependant, même si Rimini Street décidait d’actualiser les présentes déclarations prévisionnelles à l’avenir, Rimini Street décline expressément toute obligation de le faire, sauf sous obligation légale. Le lecteur est prié de ne pas considérer ces déclarations prévisionnelles comme représentant les évaluations de Rimini Street à une quelconque date postérieure à la date du présent communiqué.

© 2020 Rimini Street, Inc. Tous droits réservés. « Rimini Street » est une marque de commerce déposée de Rimini Street, Inc. aux États-Unis et dans d’autres pays, et Rimini Street, le logo Rimini Street et les combinaisons de ces derniers, ainsi que les autres marques identifiées par le symbole TM sont des marques de commerce de Rimini Street, Inc. Toutes les autres marques de commerce demeurent la propriété de leurs propriétaires respectifs et, sauf indication contraire, Rimini Street ne revendique aucune affiliation, aucun cautionnement, ni aucune association avec tout titulaire de marque ou avec toutes autres sociétés mentionnés dans les présentes.

Contact Relations Investisseurs :

Dean Pohl

Rimini Street, Inc.

+1 925 523-7636 dpohl@riministreet.com
Contact Relations Presse :

Michelle McGlocklin

Rimini Street, Inc.

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