Rimini Street, Inc. (RMNI) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects mixed signals. The company has positive developments, such as partnerships and international growth, but faces challenges like declining U.S. bookings and unclear financial metrics. The Q&A highlights optimism in strategic shifts and AI integration, yet lacks immediate financial impact and precise data. The absence of guidance and deferred metrics create uncertainty, balancing positives like reduced litigation costs and public sector initiatives. Overall, the sentiment is neutral due to the blend of potential growth with current financial ambiguities.
Key Financial Performance
Revenue $103.4 million, a year-over-year decrease of 1.2%. Excluding revenue derived from support and services provided solely for Oracle PeopleSoft products, revenue increased 2.5% versus the previous year.
Annualized Recurring Revenue (ARR) $391 million, a year-over-year decrease of 2.6%. The decline was influenced by the wind down of PeopleSoft services.
Revenue Retention Rate for Service Subscriptions 89%, with approximately 85% of subscription revenue noncancelable for at least 12 months.
Billings $66.5 million, up 2% year-over-year. Adjusted billings, excluding PeopleSoft associated billings, were $63.9 million, an increase of 6.7% year-over-year.
Gross Margin 59.9% of revenue compared to 60.7% of revenue for the prior-year third quarter. On a non-GAAP basis, gross margin was 60.4% compared to 61.1% for the prior-year third quarter. The reduction was largely due to the decline in revenue associated with PeopleSoft services.
Sales and Marketing Expenses 36.7% of revenue for the third quarter compared to 34.2% of revenue for the prior-year third quarter. On a non-GAAP basis, it was 35.7% compared to 33.6% for the prior-year third quarter.
General and Administrative (G&A) Expenses 17.6% of revenue for the third quarter compared to 15.8% for the prior-year third quarter. On a non-GAAP basis, G&A was 16.5% compared to 14.6% for the prior-year third quarter. G&A expenses were negatively impacted by over $1 million due to nonrecurring international transaction tax associated costs.
Net Income Attributable to Shareholders $2.8 million or $0.03 per diluted share compared to the prior-year third quarter net loss of $0.47 per diluted share. On a non-GAAP basis, net income was $6.9 million or $0.07 per diluted share compared to $0.22 per diluted share for the prior-year third quarter.
Non-GAAP Operating Income $8.5 million or 8.3% of revenue for the third quarter compared to 12.8% for the prior-year third quarter.
Adjusted EBITDA $10.1 million or 9.8% of revenue compared to 13.1% of revenue for the prior-year third quarter.
Cash Balance and Short-term Investments $108.7 million compared to $119.5 million for the prior-year third quarter.
Operating Cash Flow Increased $24.7 million compared to the prior-year third quarter decrease of $18.5 million. Positively impacted by the receipt of litigation settlement proceeds of $37.9 million. Excluding this payment, cash used was approximately $13 million.
Deferred Revenue $226 million compared to $223 million for the prior-year third quarter.
Remaining Performance Obligation (RPO) $611 million, a year-over-year increase of 6.4%. Excluding PeopleSoft associated backlog, RPO expanded 9.3%.
PeopleSoft Revenue Approximately 5% of revenue for the quarter compared to 8% for the prior-year third quarter. PeopleSoft calculated billings were $2.5 million compared to $5.3 million for the prior-year third quarter.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Agentic AI ERP solutions: Powered by ServiceNow's AI platform, these solutions aim to help clients modernize their ERP systems without exceeding their IT budgets. Over two dozen client engagements were closed around this innovation.
New client sales: Closed 17 new client sales transactions with a total contract value (TCV) of $63.1 million, compared to 19 transactions worth $48.7 million in the prior year.
New logos: Added 79 new logos, including major global and regional brands.
Geographic expansion: Expanded sales leadership in EMEA, Southeast Asia, and Greater China, and launched a U.S. federal and state local education sales team.
Strategic partnerships: Entered into a partnership with American Digital to provide full-stack solutions and was added to the U.S. GSA Multiple Award Schedule, enabling direct procurement by government agencies.
Sales force expansion: Increased global quota-carrying sellers to 82 from 73 in the prior year, with more sellers achieving or exceeding quotas.
Revenue retention: Achieved a revenue retention rate of 89% for service subscriptions, with 85% of subscription revenue non-cancelable for at least 12 months.
Operational leverage: Focused on improving systems, analytics, processes, and global staffing models to enhance operational efficiency.
Oracle litigation settlement: Settled litigation with Oracle, agreeing to wind down PeopleSoft services by July 31, 2028. This marks the end of Oracle-related litigation updates.
Cost optimization: Continued reorganization efforts, incurring $752,000 in charges this quarter, totaling $7.7 million since inception.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Revenue Decline: Revenue for the third quarter decreased by 1.2% year-over-year, with a 2.6% decline in annualized recurring revenue. This decline was partly due to the wind down of PeopleSoft services, which continues to impact overall revenue.
PeopleSoft Wind Down: The company is required to wind down all services for Oracle's PeopleSoft products by July 31, 2028, as part of a settlement agreement with Oracle. This has already led to a reduction in PeopleSoft-related revenue and billings, which could further impact financial performance.
Gross Margin Reduction: Gross margin decreased to 59.9% from 60.7% year-over-year, primarily due to the decline in revenue associated with PeopleSoft services. This reduction in margin could affect profitability.
Increased Operating Expenses: Sales and marketing expenses increased as a percentage of revenue, rising to 36.7% from 34.2% year-over-year. General and administrative expenses also rose, partly due to nonrecurring international transaction tax costs, which could strain operational efficiency.
Litigation Costs: Although litigation with Oracle has been settled, the company incurred $621,000 in litigation-related costs during the quarter. Future reorganization costs are also expected as part of ongoing cost optimization efforts.
Foreign Currency Impact: Operating cash flow was negatively impacted by foreign currency effects, which were unfavorable by $1.3 million during the quarter. This adds an additional layer of financial uncertainty.
Dependency on Subscription Revenue: The company’s revenue retention rate for service subscriptions was 89%, with 85% of subscription revenue being noncancelable for at least 12 months. However, any significant changes in subscription renewals could pose a risk to financial stability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Agentic AI ERP Solutions: Rimini Street plans to provide more insight and information on its agentic AI ERP solutions powered by the ServiceNow AI platform at the upcoming Analyst and Investor Day on December 3, 2025.
Sales Opportunity Pipelines: The company has materially expanded sales opportunity pipelines for future quarters, along with broad progression of many pipeline opportunities.
Growth Drivers: Rimini Street continues to pursue growth drivers leveraging direct and indirect sales channels, honing direct seller team skills, building partnerships for expanded sales reach, and executing go-to-market strategies by industry.
Strategic Partnerships: The company entered into a strategic partnership with American Digital to provide a full stack solution, including AI solutions and workflow automation on current SAP and Oracle applications.
PeopleSoft Services Wind Down: Rimini Street has agreed to wind down all PeopleSoft service revenue by July 31, 2028, as part of the Oracle settlement.
Business Outlook and Financial Goals: The company plans to outline its market opportunity, solutions, go-to-market strategy, and financial goals at the Analyst and Investor Day on December 3, 2025.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you expand on the 24 agentic AI wins with ServiceNow? What are these wins, the average deal size, and the pipeline?
A:The partnership with ServiceNow has taken about a year to align for a global rollout. There are 26 customers with a ServiceNow component, building agentic AI ERP transactions. The goal is to have 26 use cases by year-end, showcasing different ERP transactions across industries. The impact on P&L is negligible currently, with monetization expected in 2026 after use cases are developed.
Q:What will it take to get the company back to double-digit top-line growth?
A:The company is focusing on becoming a support and agentic AI ERP company, extending the life of existing systems and building next-generation technology. This approach aims to save costs for customers and reinvest in technology, driving growth in the core business.
Q:What is the current status and future of indirect and channel sales as a percentage of revenues?
A:Specific numbers will be provided during the Investor Day. The company is focused on laying out the future model and expects retention to become very strong with the agentic AI ERP model, which eliminates the need for upgrades and extends the usability of ERP systems.
Q:What is Rimini Street's role in the partnership with ServiceNow?
A:Rimini Street uses ServiceNow's tool to create agentic AI ERP solutions layered on existing ERP systems. Rimini Street handles consulting, installation, and system management, capturing most of the revenue from the partnership.
Q:Are the 24 ServiceNow-related projects with existing customers or new ones?
A:Most, if not all, of the 24 projects are with existing customers who were excited about the offering.
Q:What is the split of new client wins in TCV between the U.S. and international markets?
A:The exact split was not provided. However, bookings in the U.S. are up 6% for the first three quarters of 2025, with international bookings also showing strong growth. The company highlighted record SAP and Oracle bookings globally.
Q:Why is there an accelerated decline in U.S. bookings despite overall growth?
A:The decline is attributed to prior quarters' losses carrying forward. New bookings are not yet reflected in revenue due to ratable recognition. Metrics indicate a turnaround with positive revenue growth excluding PeopleSoft.
Q:What is driving international growth?
A:International growth is primarily driven by SAP products, which represent a significant portion of the business outside the U.S.
Q:Has the Oracle settlement impacted engagement levels with high-end prospects?
A:Yes, some prospects and partners who were previously hesitant due to litigation concerns have re-engaged with the company post-settlement.
Q:Will litigation costs trend towards zero, and can generative AI reduce service delivery costs?
A:Litigation costs will decrease significantly but not to zero due to compliance components. Generative AI is being deployed to reduce internal costs and improve service delivery, with a dedicated team and a new global CIO focusing on AI implementation.
Q:How will the new GSA schedule impact business with the U.S. government?
A:The GSA schedule simplifies procurement for federal, state, and local governments, enabling purchases without a procurement process. This is expected to benefit Rimini Street, given its significant public sector customer base.
Q:Will the government shutdown impact next quarter's results?
A:No impact is expected from the government shutdown.
Q:What is the mix of net new customers versus cross-sell in the VMware customer base?
A:The majority of VMware customers are net new logos, though there is a good number within the existing client base.
Q:What is the goal of the partnership with American Digital?
A:The partnership aims to provide solutions for customers who do not want to upgrade their systems, helping them stay on their current platforms. This benefits both Rimini Street and American Digital by retaining customers and providing cost-effective solutions.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numbers for indirect and channel sales as a percentage of revenues, the exact split of new client wins between U.S. and international markets, and the mix of net new customers versus cross-sell in the VMware customer base. Additionally, they deferred detailed financial metrics to the upcoming Investor Day.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI ERP
AI end
AI platform
AI solution
ARR subscription
ASP Oracle
Achievements record
America Inc
American Digital
Asia Greater
China sale
Commission Summary
Day majority
Digital solution
EMEA Southeast
ERP life
ERP partner
ERP software
ERP solution
GSA
Rimini Street
SAP support
ServiceNow AI
Street Inc
VP
cross sale
insight
number seller
opportunity pipeline
quota seller
sale client
sale opportunity
settlement agreement
solution ServiceNow
state
support service
RMNI Transcript
Rimini Street, Inc. (RMNI) Q1 2026 Earnings Call Transcript
Unknown5-1
The earnings call presents a mixed outlook: while there are positive signs such as increased cash balance, deferred revenue, and RPO, the decline in adjusted EBITDA and diluted EPS are concerning. The Q&A reveals optimism in AI solutions and longer contract durations, yet management's lack of specific metrics and cautious guidance tempers enthusiasm. The absence of clear year-over-year comparisons and the decision not to raise guidance despite revenue outperformance suggest a cautious market reaction, leading to a neutral stock price prediction.
Rimini Street, Inc. (RMNI) Q4 2025 Earnings Call Transcript
Positive2-20
The earnings call highlights a positive outlook with strong RPO growth, new strategic partnerships, and increased sales pipeline post-litigation. Despite a decline in EBITDA, cash reserves have improved. Management's optimistic guidance, strategic investments, and anticipated growth in North America further bolster sentiment. However, the lack of clarity on stock buybacks and early-stage adoption of new products temper expectations. Overall, the positive factors outweigh the negatives, suggesting a stock price increase in the near term.
Rimini Street, Inc. (RMNI) Q3 2025 Earnings Call Transcript
Unknown10-30
The earnings call reflects mixed signals. The company has positive developments, such as partnerships and international growth, but faces challenges like declining U.S. bookings and unclear financial metrics. The Q&A highlights optimism in strategic shifts and AI integration, yet lacks immediate financial impact and precise data. The absence of guidance and deferred metrics create uncertainty, balancing positives like reduced litigation costs and public sector initiatives. Overall, the sentiment is neutral due to the blend of potential growth with current financial ambiguities.
Rimini Street, Inc. (RMNI) Q2 2025 Earnings Call Transcript
Unknown7-31
The earnings call reflects challenges such as a revenue decline, suspended guidance due to litigation, and reduced cash balance. While there are some positive aspects like increased gross margin and backlog, the litigation with Oracle and its impact on customer engagement overshadow these. The Q&A reveals management's uncertainty regarding future growth and litigation's impact. Despite some positive growth drivers and partnerships, the overall sentiment leans negative due to the suspended guidance and ongoing uncertainties.
RMNI Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
