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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 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 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.

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, and stock-based compensation expense. These exclusions are discussed in further detail below.

Non-GAAP Net Income (Loss) is net loss adjusted to exclude litigation costs and related recoveries, write-offs of debt discount and issuance costs and make-whole applicable premium incurred upon the payoff of our former credit facility, stock-based compensation expense, and gains and losses on changes in the fair value of embedded derivatives and redeemable warrants. These exclusions are discussed in further detail below.

We exclude the following items from our non-GAAP financial measures, as applicable, for the periods presented:

Litigation Costs and Related Recoveries: Litigation costs and related recoveries relate to outside legal costs, net of insurance recoveries for our litigation activities. These costs and related insurance recoveries relate to 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.

Extinguishment Charges: The write-off of debt discount and issuance costs and make-whole applicable premium incurred upon the payoff of our former credit facility are expenses associated with our debt financing structure.  Therefore, we exclude them since they do not relate to our 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.

Gains and Losses on Changes in Fair Value of Embedded Derivatives and Redeemable Warrants: Our former credit facility, which was terminated on July 19, 2018, included features that were determined to be embedded derivatives requiring bifurcation and accounting as separate financial instruments. Until October 2017, we also had redeemable warrants that were required to be carried at fair market value with changes in fair value resulting in gains and losses in our statement of operations. We have excluded the gains and losses related to the changes in fair value of embedded derivatives and redeemable warrants given the nature of the fair value requirements. We are not able to manage these amounts as part of our business operations nor are the gains and losses core to servicing our clients, so we have excluded them.

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

EBITDA is net 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, stock-based compensation expense, gains and losses on changes in the fair value of embedded derivatives and redeemable warrants, and other debt financing expenses, as discussed above.

리미니스트리트(Rimini Street, Inc.) 소개

리미니스트리트(Nasdaq: RMNI)는 오라클, SAP 소프트웨어 제품을 위한 3자 유지보수 서비스를 제공하는 글로벌 선도기업이다. 리미니스트리트는 엔터프라이즈 소프트웨어 라이선스를 소유한 기업들이 상당한 비용을 절감하고 혁신을 위한 리소스를 확보함으로써 더 나은 비즈니스 결과를 달성할 수 있도록 즉각적인 응대를 제공하는 프리미엄 통합 애플리케이션 관리 및 지원 서비스를 제공한다. 포춘지 선정 500대 기업, 포춘 글로벌 100대 기업, 중견기업, 공공 부문 및 기타 기관 등 광범위한 산업에 걸친 2,100개 이상의 조직에서 신뢰할 수 있는 독립 지원 서비스 공급자로 리미니스트리트를 선택했다. 자세한 내용은 웹사이트(www.riministreet.com), 트위터(@riministreet), Facebook, LinkedIn에서 확인할 수 있다.

미래 예측에 대한 면책규정

본 보도문에 포함된 일부 진술은대한 우리의 기대와 그러한 이니셔티브에 대한 투자와 관련된 진술이 포함되지만 이에 국한되지는 않는다. 역사적 사실이 아닌, 1995년 제정된 민간 안보 소송 개혁법의 효력 범위 내 미래 예측에 대한 면책규정이다. 미래예측에 대한 면책규정은 일반적으로 “~일 수 있다”, “~할 것이다”, “계획한다”, “예상된다”, “믿는다”, “잠정한다”, “추정한다”, “목적으로 한다”, “예보한다”, “모색한다”, “~할 수 있다”, “기대한다”, “전망한다” 등을 비롯한 유사 다언 및 표현, 문구가 수반된다. 이러한 미래 전망 진술에는 미래 사건, 미래 기회, 글로벌 확장 및 기타 성장 이니셔티브 등에 대한 진술이 포함되며, 해당 미래 전망 진술들은 다양한 가정과 경영진의 현재 기대에 기초하므로 실제 성과에 대한 예측도 아니며 역사적 사실에 대한 진술도 아니다. 이러한 진술은 리미니스트리트 사업과 관련된 여러 위험과 불확실성의 영향을 받으며, 실제 결과는 크게 다를 수 있다. 이러한 위험과 불확실성에는 COVID-19의 대유행 기간과 경제적, 운영적, 재정적 영향, 그리고 COVID-19의 대유행에 대한 정부 당국, 고객 또는 기타 기관의 조치, 또는 사업에 영향을 미치는 재해성 사건 등이 포함되지만 이에 국한되지는 않는다. 나아가, 잠재 고객, 물가 및 금리, 리미니스트리트의 산업에 영향을 미치는 일반적 금융, 경제, 규제 및 정치적 조건의 변화, 미결 소송 또는 정부 조사 또는 새로운 소송에서 불리한 전개추가 자본 또는 부채 금융을 유리한 조건으로 조달할 필요성과 능력, 성장 이니셔티브에 대한 투자 증대를 지원하기 위한 운영으로부터 현금 흐름을 창출할 수 있는 능력, 유동성 요구사항을 충족할 수 있는 현금 및 현금 등가물의 충분성, 13.00% Series A 우선주의 조건 및 영향, 세금, 법률 및 규정의 변경, 경쟁력 있는 제품 및 가격 책정 활동, 수익성 관리 어려움, 최근 공개된 AMS(Application Management Services), Rimini Street Advanced Database Security, Salesforce Sales Cloud 및 Service Cloud 등을 포함하여 가까운 미래에 공개될 것으로 예상되는 다른 제품 및 서비스 외에, 리미니스트리트 경영진 1인, 혹은 그 이상의 인원 상실, 리미니스트리트 주식 증권의 장기 가치에 대한 불확실성, 2020년 8월 5일에 제출된 Form 10-Q로 제출된 리미니스트리트 분기별 보고서 양식에서 “위험 요소”라는 제목에 포함된 내용, 그리고 리미니스트리트 Form 10-K에 의한 연간 리포트, Form 10-Q 분기 리포트, Form 8-K의 현황 리포트를 비롯해 증권거래위원회에 제출하는 기타 보고서의 내용이 위 언급한 위험 및 불확실성 요소들에 포함되나, 상기 리스트에 위험 및 불확실성 요소들이 국한되지는 않는다. 또한, 미래 예측에 대한 면책규정은 보도 일자 이후의 이벤트 및 관점에 대한 리미니스트리트의 기대, 계획 또는 예측을 제공한다. 리미니스트리트는 이후의 사건과 전개로 리미니스트리트의 평가가 달라질 것으로 예상하고 있다. 그러나, 리미니스트리트는 향후 어느 시점에 이러한 미래 예측 면책규정에 대한 업데이트를 선택할 수 있으며, 법률에서 요구하는 경우를 제외하고, 이러한 업데이트에 대해서는 어떠한 의무도 부인한다. 미래 예측에 대한 면책규정은 보도자료의 날짜 이후 특정일에 대한 리미니스트리트 평가를 나타내는 것으로 유일한 참고 자료가 되어서는 아니한다.

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© 2020 Rimini Street, Inc. 무단 전재와 무단 복제를 금합니다. “Rimini Street”는 미국 및 기타 국가에서 리미니스트리트의 등록 상표로, 리미니스트리트 로고 및 그 조합이며, 기타 TM으로 표시된 마크는 리미니스트리트의 상표입니다. 기타 모든 상표는 해당 소유자의 자산이며, 별도로 명시하지 않는 한, 리미니스트리트는 여기에 언급된 이러한 상표 보유자 또는 다른 회사와의 어떠한 제휴, 승인, 또는 연관성을 주장하지 않습니다.

 

 

투자자 관계 문의처:

Dean Pohl

Rimini Street, Inc.

+1 925 523-7636 dpohl@riministreet.com
홍보팀 담당자 문의처:

Michelle McGlocklin

Rimini Street, Inc.

이 웹사이트는 최신 웹 표준을 사용하여 구축하였으며, 사용자의 브라우저가 이를 온전히 지원하지 않습니다. 브라우저를 업데이트해주시기 바랍니다.

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