Rimini Street Announces Fiscal Third Quarter 2018 Financial Results

Quarterly revenue of $62.6 million, up 17% year over year
Quarterly gross margin 64.5%
1,732 active clients at September 30, 2018, up 19% year over year

LAS VEGAS, November 8, 2018 Rimini Street, Inc. (Nasdaq: RMNI), a global provider of enterprise software products and services, and the leading third-party support provider for Oracle and SAP software products, today announced financial results for its third quarter ended September 30, 2018.

"During the third quarter, we continued our stated plan to invest in global sales, marketing and service delivery capacity and capabilities in order to drive future revenue growth," stated Seth A. Ravin, Rimini Street co-founder and CEO. "We also launched new marketing campaigns and our new 'Business-Driven Roadmap' sales strategy to address the large and growing market opportunity for enterprise software support. Additionally, we continued our global expansion and filled key leadership positions. Global demand for our services continued to be strong, with revenue outside the United States growing 32% year over year in the third quarter 2018 and representing 36% of total revenue in the quarter."

"During the third quarter, we paid off and completed refinancing our former credit facility with a previously announced $140 million equity transaction, significantly reducing our total debt to approximately $3 million," stated Tom Sabol, Rimini Street CFO. "The streamlined capital structure improves the balance sheet and lowers our cost of capital going forward."

Third Quarter 2018 Financial Highlights

  • Revenue was $62.6 million for the third quarter of 2018, an increase of 17% compared to $53.6 million for the third quarter of 2017.
  • Annualized Subscription Revenue was approximately $250 million for the third quarter of 2018, an increase of 17% compared to $214 million for the third quarter of 2017.
  • Active Clients totaled 1,732 as of September 30, 2018, an increase of 19% compared to 1,459 as of September 30, 2017.
  • Revenue Retention Rate was 92.0% for the trailing 12 months ended September 30, 2018 compared to 94.5% for the comparable period ended September 30, 2017.
  • Gross Margin improved to 64.5% for the third quarter of 2018 compared to 62.5% for the third quarter of 2017.
  • Operating Income was $2.5 million for the third quarter of 2018 compared to Operating Income of $7.4 million for the third quarter of 2017. The change was the result of increased litigation costs and planned spending increases on sales and marketing since the Company is no longer constrained by financial and operating covenants in its former credit facility.
  • Non-GAAP Operating Income was $10.7 million for the third quarter of 2018 compared to Non-GAAP Operating Income of $8.9 million for the third quarter of 2017.
  • Net Loss for the third quarter of 2018 was $48.4 million, or a loss of $0.85 per basic and diluted share, compared to a Net Loss of $9.0 million, or a loss of $0.37 per basic and diluted share for the third quarter of 2017. The third quarter 2018 Net Loss was primarily due to a non-cash write-off of debt discount and issuance costs of $47.4 million related to the payoff and termination, on July 19, 2018, of the Company's former credit facility.
  • Non-GAAP Net Income for the third quarter of 2018 was $6.7 million compared to a Non-GAAP Net Loss of $3.1 million for the third quarter of 2017.
  • Operating Cash Flow for the third quarter of 2018 was an outflow of $9.6 million, compared to an outflow of $4.4 million for the third quarter of 2017.
  • Adjusted EBITDA for the third quarter of 2018 was $10.8 million compared to $9.5 million for the third quarter of 2017.
  • Completed a $140 million offering of common and redeemable preferred stock on July 19, 2018, which resulted in repayment of all remaining outstanding obligations under the Company's former credit facility totaling $132.8 million, consisting of principal, make-whole applicable premium, interest and fees.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 and how they are calculated is also included under the heading "About Non-GAAP Financial Measures and Certain Key Metrics."

Third Quarter 2018 Company Highlights

  • Appointed Tim DeLisle as group vice president and general manager, North America. Mr. DeLisle has sales, service delivery and operational experience with leading firms such as EMC.
  • Appointed Eric Robinson as group vice president and general manager, SAP Product Line.  Mr. Robinson has extensive experience working with SAP products as a private-sector CIO.
  • Appointed Pat Phelan as vice president of market research. Ms. Phelan was a veteran enterprise software analyst with Gartner, with extensive experience covering the enterprise software and software support markets, including third-party support offerings and competitors.
  • Closed more than 7,500 support cases across 41 countries, and once again achieved an average client satisfaction rating on the Company's support delivery of 4.8 out of 5.0 (where 5.0 is "excellent").
  • Achieved a flawless ISO 9001 audit for the seventh consecutive year, and a flawless ISO 27001 audit for the fifth consecutive year.
  • Obtained the Australian Government's Australian Taxation Office (ATO) certification for Single Touch Payroll, well ahead of the deadline set by the ATO and ahead of the original software vendors.
  • Received the Asia-Pacific Stevie Award for Customer Service Innovation for the second consecutive year.
  • Won 14 additional awards from Stevie International Business Awards, Globee Awards and the Customer Sales & Service awards. Category wins include Customer Service Department of the Year, Customer Service Leadership of the Year, Customer Service Team of the Year, and Company of the Year.
  • Presented at nine CIO and IT and procurement leader events globally including Gartner ITAM in London and Orlando, Florida, the IDC Digital Transformation Summit in Jakarta, and the Japan Users Association of Information Systems in Tokyo.
  • Notified that the U.S. Supreme Court has agreed to hear the Company's appeal for $12.8 million in non-taxable costs that were previously awarded to Oracle in Oracle vs. Rimini Street.

Revenue Guidance

The Company is providing fourth quarter 2018 revenue guidance to be in the range of $63.0 million to $65.0 million, and tightening full year 2018 revenue guidance to now be in the range of $248 million to $250 million, which is at the high end of our previous guidance.

Webcast and Conference Call Information

Rimini Street will host a conference call and webcast to discuss the third quarter 2018 results at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on November 8, 2018. 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 6397126. 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. These non-GAAP financial measures supplement, and are not intended to represent a measure of operating performance in accordance with disclosures required by 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 located elsewhere 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 Rimini Street, Inc.

Rimini Street, Inc. (Nasdaq: RMNI) is 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. The Company offers premium, ultra-responsive and integrated application management and support services that enable enterprise software licensees to save significant costs, free up resources for innovation and achieve better business outcomes. Nearly 2,100 Fortune 500, Fortune Global 100, midmarket, public sector and other organizations from a broad range of industries rely on Rimini Street as their trusted application enterprise software products and services provider. To learn more, please visit https://www.riministreet.com, follow @riministreet on Twitter and find Rimini Street on Facebook and LinkedIn.

Forward-Looking Statements

Certain statements included in this communication are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may,” “should,” “would,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “seem,” “seek,” “continue,” “future,” “will,” “expect,” “outlook” or other similar words, phrases or expressions. These forward-looking statements include, but are not limited to, statements regarding our expectations of future events, future opportunities, global expansion and other growth initiatives and our investments in such initiatives. These statements are based on various assumptions and on the current expectations of management and are not predictions of actual performance, nor are these statements of historical facts. These statements are subject to a number of risks and uncertainties regarding Rimini Street’s business, and actual results may differ materially. These risks and uncertainties include, but are not limited to: the unknown duration and economic, operational and financial impacts on our business of the COVID-19 pandemic and the actions taken by governmental authorities, clients or others in response to the COVID-19 pandemic; catastrophic events that disrupt our business or that of our current and prospective clients; changes in the business environment in which Rimini Street operates, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting the industry in which Rimini Street operates; adverse developments in pending litigation or in the government inquiry or any new litigation; our need and ability to raise additional equity or debt financing on favorable terms and our ability to generate cash flows from operations to help fund increased investment in our growth initiatives; the sufficiency of our cash and cash equivalents to meet our liquidity requirements; the terms and impact of our outstanding 13.00% Series A Preferred Stock; changes in taxes, laws and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the customer adoption of our recently introduced products and services, including our Application Management Services (AMS), Rimini Street Advanced Database Security, and services for Salesforce Sales Cloud and Service Cloud products, in addition to other products and services we expect to introduce in the near future; the loss of one or more members of Rimini Street’s management team; uncertainty as to the long-term value of Rimini Street’s equity securities; and those discussed under the heading “Risk Factors” in Rimini Street’s Quarterly Report on Form 10-Q filed on May 7, 2020, and as updated from time to time by Rimini Street’s future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings by Rimini Street with the Securities and Exchange Commission. In addition, forward-looking statements provide Rimini Street’s expectations, plans or forecasts of future events and views as of the date of this communication. Rimini Street anticipates that subsequent events and developments will cause Rimini Street’s assessments to change. However, while Rimini Street may elect to update these forward-looking statements at some point in the future, Rimini Street specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing Rimini Street’s assessments as of any date subsequent to the date of this communication.

© 2020 Rimini Street, Inc. All rights reserved. “Rimini Street” is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rimini Street claims no affiliation, endorsement, or association with any such trademark holder or other companies referenced herein.

איש קשר ליחסי משקיעים:

Dean Pohl

Rimini Street, Inc.

+1 925 523-7636 dpohl@riministreet.com
איש קשר ליחסי תקשורת:

Melanie Ferdandes

Melanie Ferdandes