Rimini Street, Inc. Q3 FY2025 earnings call

• Simplified and refined go-to-market strategy around 3 core service pillars: support, optimize and innovate and SmartPath methodology.
• Third quarter sales bookings and billings improved, closed 17 new client sales transactions with TCV over $1 million each for aggregate TCV of $63.1 million, added 79 new logos, and achieved record RPO of $611.2 million.
• Achievements included record SAP support sales, over 100 VMware support contracts signed, and closing over 2 dozen client engagements around Agentic AI ERP innovation solution powered by ServiceNow AI platform.
• Upgraded sales leadership talent in EMEA, Southeast Asia, and Greater China, and expanded sales opportunity pipelines.
• Partnered with ServiceNow and will have 26 great use cases by end of 2025 with Agentic AI ERP solutions.
• Oracle litigation update: intends to complete wind down of PeopleSoft services by July 31, 2028.
• Continue to pursue operational leverage through improved systems, analytics, processes, and global staffing models.

Revenue for the third quarter was $103.4 million, a year-over-year decrease of 1.2%, with the United States representing 45% and international representing 55% of total revenue for the quarter. Excluding revenue derived from support and services provided solely for Oracle PeopleSoft products, revenue increased 2.5% versus the previous year. Annualized recurring revenue was $391 million for the third quarter, a year-over-year decrease of 2.6%. Revenue retention rate for service subscriptions, which makes up 95% of our revenue, was 89%. Billings for the third quarter were $66.5 million, up 2% year-over-year. Adjusted billings, which exclude the PeopleSoft associated billings, were $63.9 million, an increase of 6.7% on a year-over-year basis. Gross margin for the third quarter was 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% of revenue. Sales and marketing expenses as a percentage of revenue were 36.7% of revenue for the third quarter compared to 34.2% of revenue for the prior year third quarter. General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 17.6% of revenue for the third quarter compared to 15.8% of revenue for the prior year third quarter. Net income attributable to shareholders for the third quarter was $2.8 million or $0.03 per diluted share. On a non-GAAP basis, net income was $6.9 million or $0.07 per diluted share. Adjusted EBITDA was $10.1 million for the third quarter or 9.8% of revenue. Ended the third quarter with a cash balance and short-term investments of $108.7 million. Deferred revenue as of September 30, 2025, was $226 million. Backlog was a record $611 million as of September 30, 2025, up 6.4% year-over-year.

• The company plans to provide forward-looking guidance at its Analyst and Investor Day on December 3, 2025, outlining market opportunity, solutions, go-to-market strategy, and financial goals.

• Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today.需关注我们最近的SEC filings，包括今天提交的Form 10-Q，以了解可能影响未来结果或股价的风险。

Q: Can you expand on the partnership with ServiceNow, including deal size, traction, and pipeline?

A: Announced partnership with ServiceNow a year ago, took time to align organizations. Have 26 customers on way with ServiceNow component, goal is to have 26 great use cases by end of 2025 with different ERP transactions, customers, and industries.

Q: Your role in the ServiceNow partnership, what you're bringing to the table?

A: ServiceNow produces a tool, Rimini Street uses that tool to create agentic AI ERP solutions, layers them on existing ERP system, picks up most of the revenue with consulting labor to install and run the system.

Q: Role in GSA schedule and impact on U.S. government business?

A: Got approved for Oracle, SAP, VMware support as well as security products on GSA schedule, sees it as important purchase vehicle for federal, local, state government, and education institutions, engaged with federal agencies and partners with Merlin Cyber in federal space.

Q: Impact of Oracle settlement on prospects' engagement?

A: Definitely see change, prospects who were off the table before due to litigation are coming back, partners who didn't want to do formal partnerships before are also coming back now that litigation is settled.

Q: Litigation costs and impact of generative AI on cost of service delivery?

A: Will have some continuing litigation costs related to PeopleSoft wind down, but expect substantial reductions. Absolutely focused on deploying AI across company to reduce cost, using AI to improve service to customers and reduce labor required.