Rimini Street, Inc. Q4 FY2024 earnings call

Fourth Quarter Results

• Achieved positive momentum in billings, new clients, and renewals. Sales included a mix of products, services, and solutions, with accelerated VMware support sales across industries and geographies. Delivered 22 new client sales transactions in Q4 with TCV over $1 million.

Growth Drivers

• Implemented new go-to-market strategy in Americas with hunter-farmer sales model. Expanded global sales support organization by hiring regional CTOs and industry leaders. Expanded services to more software products, including strong VMware support and partnerships like with ServiceNow.

Oracle Litigation Update

• Rimini I litigation concluded, but Rimini II: U.S. Ninth Circuit Court of Appeals denied Oracle's rehearing petition. Paid $58.5 million in Q4 for attorney fees related to Rimini II, with an appeal pending.

PeopleSoft

• Reassessing exit from PeopleSoft business due to litigation rulings and market demand for offerings beyond support.

Revenue for the fourth quarter of 2024 was $114.2 million, and full-year 2024 revenue was $428.8 million. Client revenue in the fourth quarter: 47% from the United States and 53% from international clients; full-year 2024: 49% US and 51% international. Billings for the fourth quarter were $172.1 million, a 7.1% year-over-year increase, and full-year 2024 billings were $423 million, a 1.1% increase. Gross margin for Q4 was 63.7% of revenue, and 60.9% for full-year 2024. PeopleSoft revenue was $8 million (7% of total) in Q4 2024 and $32.9 million (7.7% of total) for full-year 2024.

Guidance

• The company is suspending guidance on future financial results until there is clarity from ongoing Oracle litigation. However, expects to return to providing guidance in 2025.

Risks

• Uncertainties related to ongoing Oracle litigation that may affect future results.
• Economic and globalization uncertainties impacting business operations and growth.

Q: Brian Kinstlinger asked about sales changes, restructuring, pipeline, and non-recurring charges.

A: Seth Ravin discussed being on the u-turn to revenue growth, impact of litigation on pipeline, and Michael Perica clarified on cost savings variance and non-recurring charges.

Q: Jared Jungjohann inquired about billings strength sources and Army deal context.

A: Seth Ravin mentioned global execution strength contributing to billings, and provided context on Army deal and federal exposure efforts.

Q: Jeff Van Rhee asked about litigation guidance, ServiceNow progress, and VMware impact.

A: Seth Ravin talked about waiting for litigation clarity to return guidance, ServiceNow partnership progress, and VMware's significant potential.

Q: Richard Baldry asked about new logo strength, macro impacts on retention, and cost-cutting considerations.

A: Seth Ravin discussed new logo growth strategies, macro uncertainties benefiting Rimini Street, and reasons for pausing deep cost-cutting to invest in growth opportunities