Rimini Street, Inc. (RMNI) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue Fourth quarter revenue was $109.8 million, a year-over-year decrease of 3.9%. Full year 2025 revenue was $421.5 million, a decrease of 1.7%. Excluding support services for PeopleSoft products, revenue decreased by 0.4% for the quarter and increased 1% for the full year. Reasons for changes include the wind-down of Oracle PeopleSoft support services and foreign exchange movements.
Annualized Recurring Revenue (ARR) ARR was $411.4 million for the fourth quarter, a year-over-year decrease of 0.8%. Excluding support services for PeopleSoft products, ARR increased by 3.1% year-over-year. The decrease is attributed to the PeopleSoft support wind-down.
Billings Fourth quarter billings were $171.3 million, relatively flat year-over-year. Full year 2025 billings were $427.9 million, an increase of 1.2%. Excluding PeopleSoft support services, full year billings increased by 4.2%. The flat growth is due to the PeopleSoft wind-down.
Gross Margin Gross margin was 60.4% for both the fourth quarter and full year 2025, compared to 63.7% for the prior fourth quarter and 60.9% for full year 2024. Non-GAAP gross margin was 60.8% for the fourth quarter and 60.9% for the full year, compared to 64.0% and 61.3% in the prior year. The decline is due to changes in revenue mix and onetime revenue recognition differences.
Net Income Net income for the fourth quarter was $724,000 or $0.01 per diluted share, compared to $0.07 per diluted share in the prior year. Full year 2025 net income was $0.39 per diluted share, compared to a net loss of $0.40 per diluted share in 2024. The improvement is due to reduced litigation expenses and settlement proceeds.
Adjusted EBITDA Adjusted EBITDA for the fourth quarter was $11.5 million or 10.4% of revenue, compared to $20 million or 17.5% of revenue in the prior year. Full year 2025 adjusted EBITDA was $49.8 million or 11.8% of revenue, compared to $53.1 million or 12.4% in 2024. The decline is attributed to increased sales and marketing expenses.
Cash Balance Cash balance at the end of 2025 was $120 million, compared to $88.8 million in the prior year. The increase is due to litigation settlement proceeds and improved operating cash flow.
Deferred Revenue Deferred revenue as of December 31, 2025, was $288 million, compared to $281 million in 2024. The increase reflects growth in new bookings and longer duration commitments.
Remaining Performance Obligations (RPO) RPO was $653 million as of December 31, 2025, an increase of 11% year-over-year. Excluding PeopleSoft-related RPO, the increase was 12%. The growth is due to new bookings and longer contract durations.
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Operating Highlights
Agentic AI ERP solutions: Launched next-generation Agentic AI ERP solutions, which can be deployed over existing ERP software to reduce costs by up to 90% and modernize infrastructure without upgrades or migrations.
Rimini Agentic UX solutions: Introduced 20 new solutions powered by ServiceNow, targeting specific ERP process challenges and delivering significant operational gains, such as faster approvals and improved data accuracy.
New client transactions: Closed 19 new client transactions over $1 million in TCV, totaling $58.1 million, and added 73 new logos, including global and regional brands.
Strategic partnerships: Strengthened partnerships with AI platform companies like ServiceNow to expand reach and offer advanced AI-powered solutions.
Cost savings and efficiency: Clients achieved up to 80% reduction in order cycle times and 23% faster case resolution using proprietary AI applications.
Revenue and billings: Revenue for 2025 was $421.5 million, a 1.7% decrease year-over-year, while billings increased by 1.2% to $427.9 million.
PeopleSoft support wind-down: Progressed in reducing PeopleSoft support clients and related revenues, with a complete wind-down planned by July 31, 2028.
Business outlook for 2026: Provided revenue growth guidance of 4%-6% and adjusted EBITDA margins of 12.5%-15.5% for 2026.
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Risk or Challenges
Oracle PeopleSoft Support Wind-down: The company is in the process of winding down support and services for Oracle's PeopleSoft software, which has already led to a reduction in related revenue. This could impact overall revenue and client retention as the wind-down progresses.
Revenue Decline: Revenue for the fourth quarter and full year 2025 decreased by 3.9% and 1.7%, respectively, compared to the prior year. This decline, even when adjusted for PeopleSoft support, indicates challenges in maintaining revenue growth.
Gross Margin Reduction: Gross margin decreased to 60.4% for both the fourth quarter and full year 2025, down from 63.7% and 60.9% in the prior year. This decline could impact profitability and operational efficiency.
Sales and Marketing Expenses: Sales and marketing expenses as a percentage of revenue increased to 37.7% for the fourth quarter and 36% for the full year 2025, up from 32.8% and 34.9% in the prior year. This increase could strain profitability if not offset by higher revenue growth.
Client Retention Challenges: The revenue retention rate for service subscriptions was approximately 88%, with 86% of subscription revenue non-cancelable for at least 12 months. While retention is relatively high, any further decline could impact recurring revenue.
Litigation Costs: Although litigation costs have decreased and are expected to be immaterial going forward, the company incurred significant legal expenses in prior years, which impacted financial performance.
Foreign Exchange Impact: Foreign currency translation negatively impacted total revenue by 0.01% in 2025, compared to a negative impact of 1.3% in 2024. While the impact is minimal, currency fluctuations remain a potential risk.
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Guidance & Outlook
Revenue Growth: The company expects first quarter 2026 revenue to be in the range of $101.5 million to $103.5 million. Full year 2026 revenue growth is projected in the 4% to 6% range.
Adjusted EBITDA Margins: Full year 2026 adjusted EBITDA margins are expected to be in the range of 12.5% to 15.5%.
Agentic AI ERP Solutions: The company anticipates growing subscriptions for both Rimini Support and new AI for real-world service offerings to fuel top and bottom-line growth in 2026. Rimini Street's Agentic AI ERP solutions are expected to modernize processes, reduce costs, and accelerate growth without disruption.
PeopleSoft Support Wind-Down: The company will complete the wind-down of support and services for Oracle's PeopleSoft software by July 31, 2028. Revenue from PeopleSoft support services has already decreased to 4% of revenue for Q4 2025 and is expected to continue declining.
Strategic Partnerships: Collaborations with AI platform companies like ServiceNow are expected to enhance the adoption of advanced AI-powered solutions, driving operational gains and efficiency improvements for clients.
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Shareholder Return Plan
Share Repurchase: Our capital allocation actions included ongoing share repurchases.
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Key Q&A
Q:What is the visibility of returning to growth and exiting the year close to 6% in 2026? Is it supported by expected new business wins or already signed business wins?
A:Management expects Q1 numbers to be solid due to subscription contracts rolling into Q1 and business already closed. They anticipate acceleration for the remainder of the year with improved visibility and higher confidence in top-line guidance.
Q:What gives you improved visibility for growth, particularly?
A:Management highlighted growing TCV, increased close rates to over 30% of the pipeline, and expanded suite of offerings as factors contributing to improved visibility and confidence in growth.
Q:How quickly do Agentic AI contracts start and ramp? Are these contracts sizable or small?
A:Agentic AI contracts vary in size. Professional service revenue is realized immediately upon delivery, while subscription components take longer to ramp. Management expects a mix of services with faster accretive capabilities than typical subscription agreements.
Q:Are the increased COGS and sales and marketing expenses due to one-time items or a new spending level?
A:The increased expenses are due to investments in sales and marketing for new products and services, including hiring 20 new sellers and raising quotas by 12%-15%. These are not expected to be permanent levels, and management aims to drive down costs over time.
Q:Are there changes in sales pipelines or win rates due to the end of litigation?
A:Management observed increased pipes, higher win rates, and faster deal cycle times post-litigation settlement. They believe this has positively impacted their ability to win deals and reduce deal cycle times.
Q:How aggressive will the company be with stock buybacks given the valuation pressure on small-cap tech?
A:Management is focused on shareholder value and evaluates opportunities for capital return, including stock buybacks. However, buybacks are constrained by share volumes, lender covenants, and other factors. They also recently paid down $5 million in term debt.
Q:What drove the strong 12% RPO growth ex-PeopleSoft, and why is it above revenue growth guidance?
A:The 12% RPO growth reflects increased confidence in achieving or exceeding top-line expectations. Management views this as momentum but notes that two quarters do not establish a long-term trend.
Q:How is sales productivity progressing, and can North America return to stronger growth this year?
A:Management observed increasing sales in North America and expects stronger growth in 2026. They are confident in their hunter-farmer model and have raised quotas and added 20 sellers to meet demand.
Q:Will growth this year be driven by new clients, better retention, or higher spend per customer?
A:Growth is expected from a combination of new client acquisitions, improved retention, and higher spend per customer due to the adoption of Agentic AI and other services.
Q:What is the scale of adoption for Rimini Agentic UX, and what stage are customers at?
A:Adoption is in early stages, with customers showing interest but still learning about the technology. Management expects adoption to accelerate in the latter half of the year as customers understand the solutions and architecture.
Q:What were the sources of strength in the quarter, and why didn’t the $5 million revenue beat flow into EBITDA?
A:The $5 million beat included $2.1 million in one-time revenue from longer-term commitments. The drop-through to EBITDA was significant but did not fully reflect in the bottom line due to the nature of the revenue being pulled into the current period.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific scale of adoption for Rimini Agentic UX, providing only general comments about early-stage interest and the need for customers to understand the technology. Additionally, while they discussed constraints on stock buybacks, they did not provide clear details on how aggressively they would pursue this strategy.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI ERP
AI application
AI automation
AI labor
AI project
AI solution
AI subscription
AI tooling
AI world
Agentic AI
Agentic UX
Clients risk
Collaborations
ERP capability
ERP process
ERP software
ERP solution
ERP system
ERP upgrade
Rimini Agentic
Rimini Street
Smart Path
Street AI
Street Agentic
Street support
UX solution
VP
agility
alliance
benefit
booking
core
cost risk
ecosystem
gain
migration SaaS
reduction
service offering
software landscape
software vendor
solution ERP
vendor upgrade
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
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