Quarterly revenue of $78.0 million, up 18.5% year over year
Quarterly gross margin of 61.3%, down from 63.8% year over year
2,077 active clients at March 31, 2020, up 12.1% year over year
LAS VEGAS, May 7, 2020 – 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 first quarter ended March 31, 2020.
"For the first quarter, we achieved record quarterly revenue, matching the high-end of management guidance, generated $26.3 million of operating cash flow, produced another quarter of net income, strengthened the balance sheet with total cash of $58.0 million at quarter end and expanded sales capabilities. Operationally, in response to the pandemic, we leveraged our secure, remote-connectivity infrastructure to seamlessly and smoothly transition our office-based employees worldwide to a work-at-home model with no material impact to our client service delivery or sales execution," stated Seth A. Ravin, Rimini Street co-founder, CEO and chairman of the board. "Having already saved our clients nearly $5 billion to date, we are the right company, at the right time, with proven solutions that are helping organizations immediately slash IT operating costs, save jobs, stabilize operations and focus their more limited resources on strategic initiatives. Prior to the pandemic, we were making investments to meet increasing global demand for our expanded product and service portfolio. This increased demand was reflected in our previously issued – and today re-affirmed – 2020 guidance for accelerated year-over-year revenue growth. We are now accelerating those investments to service additional opportunities resulting from the global economic slowdown. We remain committed to the long-term goals of improving free cash flow and growing GAAP profitability."
First Quarter 2020 Financial Highlights
- Revenue was $78.0 million for the 2020 first quarter, an increase of 18.5% compared to $65.9 million for the 2019 first quarter.
- Annualized Subscription Revenue was $310 million for the 2020 first quarter, an increase of 17.7% compared to $263 million for the 2019 first quarter.
- Active Clients as of March 31, 2020 were 2,077, an increase of 12.1% compared to 1,852 Active Clients as of March 31, 2019.
- Revenue Retention Rate was 92% for the trailing 12 months ended March 31, 2020 compared to 92% for the comparable period ended March 31, 2019.
- Gross margin was 61.3% for the 2020 first quarter compared to 63.8% for the same period last year.
- Operating income was $3.7 million for the 2020 first quarter compared to $11.2 million for the same period last year.
- Non-GAAP Operating Income was $8.9 million for the 2020 first quarter compared to $6.2 million for the same period last year.
- Net income was $2.5 million for the 2020 first quarter compared to $10.3 million for the same period last year.
- Non-GAAP Net Income was $7.7 million for the 2020 first quarter compared to $5.1 million for the same period last year.
- Adjusted EBITDA for the 2020 first quarter was $9.2 million compared to $6.6 million for the same period last year.
- Basic and diluted net income (loss) per share attributable to common stockholders was a net loss per share of $0.06 for the 2020 first quarter compared to a net income per share of $0.05 for the same period last year.
- Employee count as of March 31, 2020 was 1,302, a year-over-year increase of 17%.
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."
First Quarter 2020 Company Highlights
- Announced significant international client news, including;
◦ Two client CFO's from Brazil industrial manufacturers Metalurgica Fallgatter and Continental Parafusos, spearheaded the move to Rimini Street Support to save costs and improve productivity and business operations
◦ Hearing Australia, Australia's largest provider of government-funded services, switched to Rimini Street Support and was able to free up internal resources to undertake digital transformation initiatives
- Announced that Rimini Street established a whole-of-government volume sourcing agreement with the Australian Government, an initiative which is part of the government's agenda to transform ICT procurement to make it simpler, clearer and faster for agencies and industry to transact services.
- Announced the release of a research note from analyst firm Gartner, predicting that the third-party enterprise software support market is expected to grow by 200% from $351 million in 2019 to $1.05 billion by 2023.
- Closed over 8,400 support cases across 42 countries, and delivered more than 28,000 tax, legal and regulatory updates to clients in 33 countries, while achieving an average client satisfaction rating on the Company's support delivery of 4.8 out of 5.0 (where 5.0 is rated excellent).
- Presented at nine CIO and IT and procurement leader events worldwide, including NRF Retail's Big Show in New York, the Software Asset Management Conference in Berlin, Germany, and the TechTalk Summit in Miami, Florida.
- Partnered with seven global charities through the Rimini Street Foundation and donated more than 300 volunteer hours.
2020 Revenue Guidance
The Company is currently providing second quarter 2020 revenue guidance to be in the range of $77 million to $80 million, and maintaining full year 2020 revenue guidance in the range of $310 million to $320 million.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the first quarter 2020 results and select second quarter 2020 performance to-date commentary at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on May 7, 2020. A live webcast of the event will be available on Rimini Street's Investor Relations site at https://investors.riministreet.com. Dial-in participants can access the conference call by dialing (855) 213-3942 in the U.S. and Canada and enter the code 2672493. 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.