Quarterly revenue of $76.1 million, up 11.7% year over year
Fiscal year revenue of $281.1 million, up 10.9% year over year
Fiscal year gross margin of 62.6%, up from 62.1% in 2018
2,063 active clients at December 31, 2019, up 14.5% year over year
Note: During the fourth quarter of fiscal 2019, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), using the full retrospective method, effective as of January 1, 2017. The financial statements and guidance provided in this press release reflects the impact of adopting ASC 606. Due to the adoption of this standard, we have revised previously reported financial statements resulting in an increase to revenue of $1.8 million for the nine months ended September 30, 2019. In addition, we have revised the previously reported financial statements resulting in increases to revenue of $0.4 million and of $0.7 million for the three months and year ended December 31, 2018, respectively. We have included additional information to reconcile the impact of adopting ASC 606 on pages 8-9 of this press release.
LAS VEGAS, March 12, 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 fourth quarter and for the fiscal year ended December 31, 2019.
"For 2019, we achieved record fourth quarter and fiscal year revenue that exceeded management guidance, increased our gross margin, and continued to improve our balance sheet with reduced debt and increased cash," stated Seth A. Ravin, Rimini Street co-founder, CEO and Chairman of the Board. "Additionally, we experienced improved performance from investments in global sales, the launch of new products and services and expanded geographic operations. We continue to see growing global demand for our enterprise software products and services, and plan to continue making investments in 2020 to support growth."
Fourth Quarter 2019 Financial Highlights
- Revenue was $76.1 million for the 2019 fourth quarter, an increase of 11.7% compared to $68.1 million for the 2018 fourth quarter.
- Annualized Subscription Revenue was approximately $302 million for the 2019 fourth quarter, an increase of 11.4% compared to $271 million for the 2018 fourth quarter.
- Active Clients as of December 31, 2019 were 2,063, an increase of 14.5% compared to 1,802 Active Clients as of December 31, 2018.
- Revenue Retention Rate was 92% for the trailing 12 months ended December 31, 2019 compared to 91% for the comparable period ended December 31, 2018.
- Gross margin was 60.2% for the 2019 fourth quarter compared to 64.6% for the 2018 fourth quarter.
- Operating income was $1.6 million for the 2019 fourth quarter compared to $6.6 million for the 2018 fourth quarter.
- Non-GAAP Operating Income was $5.1 million for the 2019 fourth quarter compared to $13.0 million for the 2018 fourth quarter.
- Net loss was $0.2 million for the 2019 fourth quarter compared to net income of $5.4 million for the 2018 fourth quarter.
- Non-GAAP Net Income was $3.3 million for the 2019 fourth quarter compared to $11.8 million for the 2018 fourth quarter.
- Adjusted EBITDA for the 2019 fourth quarter was $4.7 million compared to $13.0 million for the 2018 fourth quarter.
- Basic and diluted earnings per share attributable to common stockholders was a net loss per share of $0.10 for the 2019 fourth quarter compared to a net loss per share of $0.01 for the 2018 fourth quarter.
Full Year 2019 Financial Highlights
- Revenue was $281.1 million for 2019, an increase of 10.9% compared to $253.5 million for 2018.
- Gross margin increased to 62.6% for 2019 compared to 62.1% for 2018.
- Operating income was $22.1 million for 2019 compared to $29.5 million for 2018.
- Non-GAAP Operating Income was $26.8 million for 2019 compared to $35.2 million for 2018.
- Net income was $17.5 million for 2019 compared to a net loss of $64.0 million for 2018.
- Basic and diluted net loss per share attributable to common stockholders was $0.12 for 2019 compared to a net loss of $1.22 for 2018.
- Non-GAAP Net Income was $22.0 million for 2019 compared to Non-GAAP Net Loss of $4.7 million for 2018.
- Adjusted EBITDA was $27.0 million for 2019 compared to $35.3 million for 2018.
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.”
2019 Company Highlights
- Announced many global client wins, including Hyundai-Kia Motors, who selected Rimini Street for support and maintenance of its global database portfolio and BrandSafway and EBSCO Industries, each of whom expanded their Rimini Street service contracts to include Rimini Street Application Management Services for Salesforce.
- Launched the global availability of Application Management Services for SAP, and Application Management Services for Oracle, that integrate the Company's Support Services and Application Management Services into a turnkey solution for running and supporting Oracle and SAP systems.
- Saved clients nearly $5 billion in total maintenance costs since the Company's inception.
- Expanded investment and operations globally including:
◦ Eastern Europe, launching sales in Poland and further building on our presence in Russia
◦ Latin America, launching a new subsidiary and opening a new office in Mexico
◦ Southeast Asia, launching a new subsidiary and opening a new office in Singapore
◦ The Middle East, launching a new subsidiary and opening a new office in Dubai.
- Closed over 31,000 support cases across 55 countries, and delivered more than 70,000 tax, legal and regulatory updates to clients in 38 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).
- Honored with 34 awards, including two gold Stevie awards for "Company of the Year," a gold Stevie Sales & Customer Service Award for "Customer Service Outstanding Performance of the Year" in the Information Technology Service category and 24 other awards for customer service excellence.
- Presented at 74 CIO and IT and procurement leader events worldwide, including Gartner Symposium/IT Expos in the U.S., Australia, Spain and Japan; IDC's CIO Empowerment Conference in Mexico; Government ICT in the UK; NRF in New York; and IDC DX Summit in Singapore.
- Partnered with 68 charities around the world through the Rimini Street Foundation, providing financial contributions, in-kind donations and more than 800 employee volunteer hours. The Foundation also extended its charitable work to Germany and Taiwan in 2019.
2020 Revenue Guidance
The Company is currently providing first quarter 2020 revenue guidance to be in the range of $76 million to $78 million, and for full year 2020 revenue guidance to be in the range of $310 million to $320 million.
Effective March 12, 2020, by action of the Company's Board of Directors, Stanley Mbugua, the Company's group vice president and chief accounting officer, will serve as both the Company's "principal accounting officer" and "principal financial officer" for purposes of authorizing and executing filings and related documentation with the United States Securities and Exchange Commission.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the fourth quarter and fiscal year 2019 results at 5:00 p.m. Eastern / 2:00 p.m. Pacific time on March 12, 2020. 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 6885725. 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.